EX-3.132
BYLAWS OF
Park Avenue Publishing, Inc.
ARTICLE I. OFFICES
Principal Executive Office [Corp. Code Sec. 1502(a)]
Section 1.01. The principal executive office of the corporation is located
at 3101 Pomona Blvd., Pomona, CA 91768.
Other Offices
Section 1.02. The corporation may also have offices at such other places,
within or without the State of California, where the corporation is qualified to
do business, as the Board of Directors may from time to time designate or the
business of the corporation may require.
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ARTICLE II. DIRECTORS
Definitions
"Board"
Section 2.01. (a) As used in these Bylaws, the word "Board" means the
Board of Directors of the corporation.
"Directors"
(b) "Directors," as used in these bylaws in relation to any power or duty
requiring collective action, means the Board of Directors of the corporation.
Responsibility of Board [Corp. Code Sec. 300(a)]
Section 2.02. Subject to the provisions of the General Corporation Law
and to any limitations in the Articles of Incorporation relating to action
required to be approved by the shareholders, as that term is defined in
California Corporations Code Section 153, or by the outstanding shares, as that
term is defined in California Corporations Code Section 152, the business and
affairs of the corporation shall be managed and all corporate powers shall be
exercised by or under the direction of the Board of Directors. The Board may
delegate the management of the day-to-day operation of the business of the
corporation to a management company or other person provided that the business
and affairs of the corporation shall be managed and all corporate powers shall
be exercised under the ultimate direction of the Board.
Number of Directors [Corp. Code Sec. 212(a)]
Section 2.03. The number of directors of the corporation shall be three.
Election and Term of Office [Corp. Code Sec. 301]
Section 2.04. Directors shall be elected at each annual meeting of
shareholders to hold office until the next annual meeting. Each director,
including a director elected to fill a vacancy (see Sec. 2.07 of these Bylaws),
shall hold office until the expiration of the term for which elected and until a
successor has been elected and qualified.
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Resignation [Corp. Code Sec. 305(d)]
Section 2.05. Any director may resign effective on giving written notice
to the Chairman of the Board, the President, the Secretary, or the Board of
Directors of the corporation, unless the notice specifies a later time for the
effectiveness of the resignation. If the resignation is effective at a future
time, a successor may be elected to take office when the resignation becomes
effective.
Vacancies [Corp. Code Secs. 192, 302-304]
When Vacancy Occurs [Corp. Code Sec. 192]
Section 2.06. (a) A vacancy on the Board occurs when any authorized
position of director is not filled by a duly elected director, whether caused by
death, resignation, removal, change in the authorized number of directors (by
the Board or the shareholders), or otherwise.
Declaration of Vacancy [Corp. Code Sec. 302]
(b) The Board may declare vacant the office of a director who has been
declared of unsound mind by order of court or convicted of a felony.
Removal of Directors by Shares [Corp. Code Sec. 303(a)]
(c) Any or all of the directors may be removed without cause if removal is
approved by the outstanding shares, as that term is defined in Section 152 of
the California Corporations Code, subject to the following:
(1) No director may be removed (unless the entire Board is removed) when
the votes cast against removal, or not consenting in writing to that
removal, would be sufficient to elect that director if voted
cumulatively at an election at which the same total number of votes
were cast (or, if action is taken by written consent, all shares
entitled to vote were voted) and the entire number of directors
authorized at the time of the director's most recent election were
then being elected; and
(2) When by the provisions of the Articles the holders of the shares of
any class or series, voting as a class or series, are entitled to
elect one or more directors, any director so selected may be removed
only by the applicable vote of the holders of the shares of that
class or series.
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Removal by Court [Corp. Code Sec. 304]
(d) Shareholders holding at least ten percent of the number of outstanding
shares of any class of the corporation may sue in the superior court of the
county in which the principal executive office of the corporation is located to
remove from office any director in case of fraudulent or dishonest acts or gross
abuse of authority or discretion with reference to the corporation. In such a
case, the corporation must be made a party to the action.
Reduction of Authorized Number of Directors
[Corp. Code Sec. 303(b)]
(e) Any reduction of the authorized number of directors does not remove
any director prior to the expiration of the director's term of office.
Provisions Exclusive [Corp. Code Sec. 303(c)]
(f) Except as provided in paragraphs (a) through (d) of this Section 2.06,
no director may be removed from office prior to the expiration of the director's
term of office.
Filling Vacancies
By Board [Corp. Code Sec. 305(a)]
Section 2.07. (a) Except as otherwise provided in the Articles or in these
Bylaws, and except for a vacancy created by the removal of a director as
provided in Section 2.06, vacancies on the Board may be filled by approval of
the Board pursuant to Section 151 of the Corporations Code, or, if the number of
directors then in office is less than a quorum, by (1) the unanimous written
consent of the directors then in office; (2) the affirmative vote of a majority
of the directors then in office at a meeting held pursuant to notice or waivers
of notice complying with Section 307 of the Corporations Code; or (3) a sole
remaining director.
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By Shareholders [Corp. Code Secs. 305(a),(b),603(d)]
(b) Unless the Articles or a bylaw adopted by the shareholders provide
that vacancies occurring in the Board by reason of the removal of directors may
be filled by the Board, those vacancies may be filled only by approval of the
shareholders, as that term is defined in Section 153 of the California
Corporations Code. Moreover, the shareholders may elect a director at any time
to fill any vacancy not filled by the directors. Any election of directors by
written consent shall require the consent of a majority of the outstanding
shares entitled to vote; provided, however, that no director shall be elected by
written consent to fill a vacancy created by removal of any director except by
the unanimous written consent of all shares entitled to vote for the election of
directors.
By Special Meeting [Corp. Code Sec. 305(c)]
(c) If, after the filling of any vacancy by the directors, the directors
then in office who have been elected by the shareholders shall constitute less
than a majority of the directors then in office, any holder or holders of an
aggregate of five (5) percent or more of the total number of shares at the time
outstanding having the right to vote for such directors may call a special
meeting of the shareholders, or apply to the superior court of the county in
which the principal executive office of the corporation is located for an order
that a special meeting be held to elect the entire Board. The term of office of
any director not elected by the shareholders shall terminate on the election of
a successor.
Call of Meetings [Corp. Code Secs. 212(b)(2), 307(a)(1)]
Section 2.08. Meetings of the Board may be called by the Chairman of the
Board, or the President, or any Vice President, or the Secretary, or any two
directors of the corporation.
Place of Meetings [Corp. Code Secs. 212(b)(2), 307(a)(5)]
Section 2.09. Meetings of the Board may be held at any place within or
without California which has been designated in the notice of the meeting or, if
not stated in the notice or if there is no notice, designated by resolution of
the Board, and if not so designated, then at the principal executive office of
the corporation.
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Time of Regular Meetings [Corp. Code Secs. 212(b)(2), 307(a)(2)]
Section 2.10. Regular meetings of the Board of Directors shall be held on
the second Tuesday of March commencing at the hour of l0:A.M. Should any such
day as herein specified fall on a legal holiday, the meeting scheduled for that
day shall be held at the same hour on the next succeeding day which is not a
legal holiday.
Notice of Meetings [Corp. Code Secs. 113, 118, 212(b)(2), 307(a)(2)]
Section 2.11. Regular meetings of the Board may be held without notice.
Special meetings shall be held on four (4) days' notice by first-class mail,
postage prepaid, or forty-eight (48) hours' notice delivered personally or by
telephone or telegraph. The notice need not specify the purpose of the meeting.
Waiver of Notice [Corp. Code Secs. 212(b)(2), 307(a)(2), (3)]
Section 2.12. Notice of any meeting need not be given to any director who
signs a waiver of notice, or a consent to holding the meeting or an approval of
the minutes thereof, whether before or after the meeting, or who attends the
meeting without protesting, prior to the meeting or at its commencement, the
lack of notice to such director. Any waiver of notice need not specify the
purpose of the meeting. All waivers, consents, and approvals of minutes shall be
filed with the corporate records or made a part of the minutes of the meeting to
which they pertain.
Quorum [Corp. Code Secs. 212(b)(4), 307(a)(7)]
Section 2.13. A majority of the authorized number of directors constitutes
a quorum of the Board for the transaction of business.
Transactions of Board [Corp. Code Sec. 307(a)(8)]
Section 2.14. Except as otherwise provided in the Articles of
Incorporation or in these Bylaws, every act or decision done or made by a
majority of the directors present at a meeting duly held at which a quorum is
present is the act of the Board, subject to the provisions of Sections 2.23 and
2.28 of these Bylaws.
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Withdrawal of Quorum [Corp. Code Sec. 307(a)(8)]
Section 2.15. Any meeting at which a quorum is initially present may
continue to transact business notwithstanding the withdrawal of directors, if
any action taken is approved by at least a majority of the required quorum for
such meetings.
Adjournment [Corp. Code Sec. 307(a)(4)]
Section 2.16. A majority of the directors present, whether or not a quorum
is present, may adjourn any meeting to another time and place. If the meeting is
adjourned for more than twenty-four (24) hours, however, notice of the
adjournment to another time or place must be given prior to the time of the
adjourned meeting to the directors who were not present at the time of the
adjournment.
Section 2.17. [Reserved]
Conduct of Meetings [Corp. Code Sec. 212(b)(2)]
Section 2.18. At every meeting of the Board, the Chairman of the Board or,
in his absence, the President of the corporation or, in his absence, the Vice
President designated by him or, in the absence of such designation, a chairman
chosen by a majority of the directors present shall preside. The Secretary of
the corporation shall act as Secretary of the Board. In the event the Secretary
shall be absent from any meeting, the Chairman may appoint any person to act as
secretary of the meeting.
Telephone Participation [Corp. Code Secs. 212 (b)(2), 307(a)(6)]
Section 2.19. Members of the Board may participate in any meeting through
use of conference telephone or similar communications equipment, whenever such
participation is authorized by resolution adopted by the Board, so long as all
members participating in such meeting can hear one another.
Action Without Meeting [Corp. Code Sec. 307(b)]
Section 2.20. Any action required or permitted to be taken by the Board
may be taken without a meeting, if all members of the Board shall individually
or collectively consent in writing to such action. Such written consent or
consents must be filed with the minutes of the proceedings of the Board. Action
by written consent has the same force and effect as a unanimous vote of the
directors.
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Duties of Directors [Corp. Code Sec. 309]
Section 2.21. (a) Each director shall perform the duties of a director,
including duties as a member of any committee of the Board on which the director
may serve, in good faith, in a manner such director believes to be in the best
interests of the corporation and with such care, including reasonable inquiry,
as an ordinarily prudent person in a like position would use under similar
circumstances.
(b) In performing his or her duties, each director shall be entitled, so
long as in any such case he or she acts in good faith after reasonable inquiry
when the need for it is indicated by the circumstances and without knowledge
that would cause such reliance to be unwarranted, to rely on information,
opinions, reports, or statements, including financial statements and other
financial data, in each case prepared or presented by:
(1) One or more officers or employees of the corporation whom the
director believes to be reliable and competent in the matters
presented;
(2) Counsel, independent accountants, or other persons as to matters
which the director believes to be within such person's professional
or expert competence; or
(3) A committee of the Board on which the director does not serve, as to
matters within its designated authority, which committee the
director believes to merit confidence.
(c) A person who performs the duties of director in accordance with
paragraphs (a) and (b) of this Section 2.21 shall have no liability based on any
alleged failure to discharge the person's obligation as a director.
Compensation [Corp. Code Sec. 212(b)(2)]
Section 2.22. Directors shall receive such compensation for their services
and reimbursement for their expenses as shall be determined from time to time by
resolution of the Board. Any director may serve the corporation in any other
capacity as an officer, agent, employee, or otherwise and receive compensation
therefor.
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Transactions With Corporation [Corp. Code Sec. 310]
Section 2.23. (a) No contract or other transaction between the corporation
and one or more of its directors, or between the corporation and any
corporation, firm or association in which one or more of the directors of this
corporation has a material financial interest, is either void or voidable
because such director or directors or such other corporation, firm, or
association are parties or because such director or directors are present at the
meeting of the Board or Board committee which authorizes, approves, or ratifies
the contract or transaction, if:
(1) The material facts as to the transaction and as to the director's
interest are fully disclosed or known to the shareholders and such
contract or transaction is approved by the shareholders, as that
term is defined in Section 153 of the California Corporations Code,
in good faith, with the shares owned by the interested director or
directors not being entitled to vote thereon; or
(2) The material facts as to the transaction and as to such director's
interest are fully disclosed or known to the Board or Board
committee, and the Board or Board committee authorizes, approves, or
ratifies the contract or transaction in good faith by a vote
sufficient without counting the vote of the interested director or
directors and the contract or transaction is just and reasonable as
to the corporation at the time it is authorized, approved, or
ratified; or
(3) As to contracts or transactions not approved as provided in clauses
(1) and (2) above, of this paragraph (a), the person asserting the
validity of the contract or transaction sustains the burden of
proving that the contract or transaction was just and reasonable as
to the corporation at the time it was authorized, approved, or
ratified.
A mere common directorship does not constitute a material financial
interest within the meaning of the above provisions. Nor is a director
interested within the meaning of the above provisions in a resolution fixing the
compensation of another director as a director, officer, or employee of
corporation, notwithstanding the fact that the first director is also receiving
compensation from the corporation.
(b) No contract or other transaction between the corporation and any
corporation or association of which one or more of the directors of this
corporation are directors is either void or voidable because such director or
directors are present at the Board or Board committee meeting which authorizes,
approves, or ratifies the contract or transaction, if:
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(1) The material facts as to the transaction and as to such director's
other directorship are fully disclosed or known to the Board or
Board committee, and the Board or Board committee authorizes,
approves, or ratifies the contract or transaction in good faith by a
vote sufficient without counting the vote of the common director or
directors or the contract or transactions approved by the
shareholders, as that term is defined in Section 153 of the
California Corporations Code, in good faith; or
(2) As to contracts or transactions not approved as provided in clause
(1) of this paragraph (b), the contract or transaction is just and
reasonable as to the corporation at the time it is authorized,
approved, or ratified.
This provision does not apply to contracts or transactions covered by
paragraph (a) of this Section 2.23.
(c) Interested or common directors may be counted in determining the
presence of a quorum at a meeting of the Board or Board committee which
authorizes, approves, or ratifies a contract or transaction.
Liability of Directors [Corp. Code Sec. 316(a), (b), (e)]
Section 2.24. (a) Subject to the provisions of Section 2.21 of these
Bylaws, directors who approve any of the following corporate actions shall be
jointly and severally liable to the corporation for the benefit of all of the
creditors or shareholders entitled to institute an action under Section 316(c)
of the California Corporations Code:
(1) The making of any distribution to its shareholders, as that term is
defined in Section 166 of the California Corporations Code, to the
extent that it is contrary to the provisions of Sections 500 to 503,
inclusive, of the California Corporations Code.
(2) The distribution of assets to shareholders after institution of
dissolution proceedings of the corporation, if any, without paying
or adequately providing for all known liabilities of the
corporation, excluding any claims not filed by creditors within the
time limit set in the notice given to creditors under the provisions
of Sections 1800 to 2011, inclusive, of the California Corporations
Code.
(3) The making of any loan or guaranty contrary to Section 315 of the
California Corporations Code.
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(b) a director who is present at a meeting of the Board, or any Board
committee, at which action specified in paragraph (a) of this Section 2.24 is
taken and who abstains from voting shall be considered to have approved the
action.
(c) Directors liable under this Section of these Bylaws shall be entitled
to be subrogated to the rights of the corporation:
(1) With respect to clause (1) of paragraph (a) of this Section 2.24,
against shareholders who received the distribution.
(2) With respect to clause (2) of paragraph (a) of this Section 2.24,
against shareholders who received the distribution of assets.
(3) With respect to clause (3) of paragraph (a) of this Section 2.24,
against the person who received the loan or guaranty.
Indemnification [Corp. Code Sec. 317]
Definitions [Corp. Code Sec. 317(a)]
Section 2.25. (a) For the purposes of Sections 2.26-2.32 of these Bylaws,
"agent" means any person who is or was a director, officer, employee, or other
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, or other enterprise.
(b) For the purposes of Sections 2.26-2.32 of these Bylaws, "proceeding"
means any threatened, pending, or completed action or proceeding whether civil,
criminal, administrative, or investigative; and "expenses" include without
limitation attorneys' fees and any expenses of establishing a right to
indemnification under Section 2.27 or Paragraph (d) of Section 2.28.
Power to Indemnify [Corp. Code Sec. 317(b), (c)]
Section 2.26. (a) The corporation shall have power to indemnify any person
who was or is a party or is threatened to be made a party to any proceeding
(other than an action by or in the right of the corporation to procure a
judgement in its favor) by reason of the fact that that person is or was an
agent of the corporation, against expenses, judgements, fines, settlements, and
other amounts actually and reasonably incurred in connection with that
proceeding if the person acted in good faith and in a manner the person
reasonably believed to be in the best interests of the corporation and, in the
case of a criminal proceeding, had no
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reasonable cause to believe the conduct of that person was unlawful. The
termination of any proceeding by judgement, order, settlement, conviction, or on
a plea of nolo contendere or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith and in a manner that the
person reasonably believed to be in the best interests of the corporation or
that the person had reasonable cause to believe that the person's conduct was
unlawful.
(b) The corporation shall have power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending, or
completed action by or in the right of the corporation to procure a judgement in
its favor by reason of the fact that the person is or was an agent of the
corporation, against expenses actually and reasonably incurred by the person in
connection with the defence or settlement of that action if that person acted in
good faith, in a manner such person believed to be in the best interests of the
corporation and its shareholders. No indemnification shall be made for any of
the following:
(1) Any claim, issue, or matter for which any person shall have been
adjudged to be liable to the corporation in the performance of that
person's duty to the corporation and its shareholders, unless and
only to the extent that the court in which the proceeding was or is
pending shall determine on application that, in view of all the
circumstances of the case, the person is fairly and reasonably
entitled to indemnity for expenses, and then only to the extent that
the court shall determine;
(2) Amounts paid in settling or otherwise disposing of a threatened or
pending action, with or without court approval; or
(3) Expenses incurred in defending a threatened or pending action that
is settled or otherwise disposed of without court approval.
Expenses of Successful Agent [Corp. Code Sec. 317(d)]
Section 2.27. To the extent that an agent of this corporation has been
successful on the merits in the defense of any proceeding referred to in Section
2.26 or in defense of any claim, issue, or matter therein, the agent shall be
indemnified against expenses actually and reasonably incurred by the agent in
connection therewith.
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Determination That Indemnification Is Proper
[Corp. Code Sec. 317(e)]
Section 2.28. Except as provided in Section 2.27, any indemnification
under Sections 2.26-2.31 of these Bylaws shall be made by the corporation only
if authorized in the specific case, on a determination that indemnification of
the agent is proper in the circumstances because the agent has met the
applicable standard of conduct set forth in Section 2.26 by:
(a) A majority vote of a quorum consisting of directors who are not
parties to that proceeding;
(b) If such a quorum of directors is not obtainable, by independent
legal counsel in a written opinion;
(c) Approval of the shareholders, as that term is defined in Section 153
of the California Corporations Code, with the shares owned by the
person to be indemnified not being entitled to vote thereon; or
(d) The court in which that proceeding is or was pending on application
made by the corporation or the agent or the attorney or other person
rendering services in connection with the defence, whether or not
the application by the agent, attorney, or other person is opposed
by the corporation.
Advance of Expenses [Corp. Code Sec. 317(f)]
Section 2.29. Expenses incurred in defending any proceeding may be
advanced by the corporation prior to the final disposition of that proceeding on
receipt of an undertaking by or on behalf of the agent to repay that amount if
it is determined ultimately that the agent is not entitled to be indemnified as
authorized in Sections 2.26-2.31 of these Bylaws.
Nonexclusive Provisions [Corp. Code Sec. 317(g)]
Section 2.30. The indemnification authorized by Sections 2.26-2.31 of
these Bylaws shall not be deemed exclusive of any additional rights to
indemnification for breach of duty to the corporation and its shareholders while
acting in the capacity of a director or officer of the corporation to the extent
the additional rights to indemnification are authorized in an article provision
adopted pursuant to California Corporations Code Section 204(a)(11). The
indemnification provided by Sections 2.26-2.31 of these Bylaws for acts,
omissions, or transactions while acting in the capacity of, or while serving as,
a director or officer of the corporation but not involving breach of duty to the
corporation and
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its shareholders shall not be deemed exclusive of any other rights to which
those seeking indemnification may be entitled under any bylaw, agreement, vote
of shareholders or disinterested directors, or otherwise, to the extent the
additional rights to indemnification are authorized in the Articles.
An Article provision authorizing indemnification "in excess of that
otherwise permitted by Corporations Code Section 317" or "to the fullest extent
permissible under California law" or the substantial equivalent thereof shall be
construed to be both a provision for additional indemnification for breach of
duty to the corporation and its shareholders as referred to in, and with the
limitations required by, California Corporations Code Section 204(a)(11), and a
provision for additional indemnification.
The rights to indemnity hereunder shall continue for a person who has
ceased to be a director, officer, employee, or agent and shall inure to the
benefit of the heirs, executors, and administrators of the person. Nothing
contained in this Section shall affect any right to indemnification to which
persons other than the directors and officers may be entitled by contract or
otherwise.
Limitation on Indemnification [Corp. Code Sec. 317(h)]
Section 2.31. No indemnification or advance shall be made under Sections
2.26-2.29 of these Bylaws, except as provided in Section 2.27 or Paragraph (d)
of Section 2.28, in any circumstance in which it appears:
(a) That it would be inconsistent with a provision of the Articles, these
Bylaws, a resolution of the shareholders, or an agreement in effect at the time
of the accrual of the alleged cause of action asserted in the proceeding in
which the expenses were incurred or other amounts were paid, that prohibits or
otherwise limits indemnification; or
(b) That it would be inconsistent with any condition expressly imposed by
a court in approving a settlement.
Insurance [Corp. Code Sec. 317(i)]
Section 2.32. The corporation shall have power to purchase and maintain
insurance on behalf of any agent against any liability asserted against or
incurred by the agent in that capacity or arising out of the agent's status as
an agent, whether or not the corporation would have power to indemnify the agent
against that liability under the provisions of Sections 2.25-2.31 of these
Bylaws.
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The fact that the corporation owns all or a portion of the shares of the
company issuing a policy of insurance shall not affect the corporation's power
to purchase and maintain that insurance in the following circumstances: (1) if
authorized in the corporation's articles, any policy issued is limited to the
extent provided in Corporations Code Section 204(d); or (2) the company issuing
the policy is organized, licensed, and operated in a manner that complies with
the insurance laws and regulations applicable to its jurisdiction of
organization; that company provides procedures for processing claims that do not
permit it to be subject to direct control of the corporation that purchased the
policy; and the policy provides for some manner of risk sharing between the
issuer and purchaser of the policy, and some unaffiliated person or persons.
Risk sharing may be undertaken by providing for more than one unaffiliated owner
of the company issuing the policy, or by providing that a portion of the
coverage furnished will be obtained from some unaffiliated insurer or reinsurer.
Board Committees
Authority to Appoint [Corp. Code Sec. 311]
Section 2.33. (a) The Board may, by resolution adopted by a majority of
the authorized number of directors, designate one or more committees, each
consisting of two or more directors, to serve at the pleasure of the Board. The
Board may designate one or more directors as alternate members of any committee,
who may replace any absent member at any meeting of the committee. The
appointment of members or alternate members of a committee shall require the
vote of a majority of the authorized number of directors.
Authority of Committee [Corp. Code Sec. 311]
(b) Any such committee referred to in paragraph (a) of this Section 4.33,
to the extent provided in the Board resolution or in these Bylaws, shall have
all the authority of the Board, except with respect to:
(1) The approval of any action for which the General Corporation Law
also requires shareholders' approval, as that term is defined in
Section 153 of the California Corporations Code, or approval of the
outstanding shares, as that term is defined in Section 152 of the
California Corporations Code.
(2) The filling of vacancies on the Board or in any committee.
(3) The fixing of compensation of the directors for serving on the Board
or on any committee.
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(4) The amendment or repeal of these Bylaws or the adoption of new
bylaws.
(5) The amendment or repeal of any resolution of the Board which by its
express terms is not so amendable or repealable.
(6) A distribution to the shareholders of the corporation, as defined in
Section 166 of the California Corporations Code, except at a rate or
in a periodic amount or within a price range determined by the
Board.
(7) The appointment of other committees of the Board or the members
thereof.
Applicability of Other Sections [Corp. Code Sec. 307(c)]
(c) The provisions of Sections 2.08-2.17, inclusive, and of Sections 2.19
and 2.20 of this Article II apply to such committees, mutatis mutandis.
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ARTICLE III. DETERMINING SHAREHOLDERS OF RECORD
Record Date Fixed by Board [Corp. Code Secs. 212(b)(7), 701(a)]
Section 3.01. (a) In order that the corporation may determine the
shareholders entitled to notice of any meeting or to vote, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any other lawful
action, the Board may fix, in advance, a record date, which shall not be more
than sixty (60) nor less than ten (10) days prior to the date of such meeting
nor more than sixty (60) days prior to any of the other aforementioned actions.
Record Date Not Fixed [Corp. Code Sec. 701(b)]
(b) If no record date is fixed:
(1) The record date for determining shareholders entitled to notice of
or to vote at a meeting of shareholders shall be the close of
business on the business day next preceding the day on which notice
is given or, if notice is waived, at the close of business on the
business day next preceding the day on which the meeting is held.
(2) The record date for determining shareholders entitled to give
consent to corporate action in writing without a meeting (see Sec.
4.16), when no prior action by the Board has been taken, shall be
the day on which the first written consent is given.
(3) The record date for determining shareholders for any other purpose
shall be the close of business on the day on which the Board adopts
the resolution relating thereto, or the sixtieth (60th) day prior to
the date of such other action, whichever is later.
Record Date for Adjourned Meeting [Corp. Code Sec. 701(c)]
(c) A determination of shareholders of record entitled to notice of or to
vote at a meeting of shareholders shall apply to any adjournment of the meeting
unless the Board fixes a new record date for the adjourned meeting. The Board
must, however, fix a new record date if the meeting is adjourned for more than
forty-five (45) days from the date set for the original meeting.
17
Rights of Shareholders of Record [Corp. Code Sec. 701(d)]
(d) Shareholders at the close of business on the record date are entitled
to notice and to vote or to receive the dividend, distribution, or allotment of
rights, or to exercise the rights, as the case maybe, notwithstanding any
transfer of any shares on the books of the corporation after the record date,
except as otherwise provided in the Articles or by agreement or in the General
Corporation Law.
18
ARTICLE IV. SHAREHOLDERS' MEETINGS
Place of Meetings [Corp. Code Secs. 212(b)(2), 600(a)]
Section 4.01. Meetings of shareholders shall be held at any place within
or without the State of California designated in the notice of the meeting or by
resolution of the Board of Directors. In the absence of any such designation or
resolution, shareholders' meetings shall be held at the principal executive
office of the corporation.
Annual Meeting
Time of Meeting; Business Transacted
[Corp. Code Secs. 212(b)(2), (4), 600(b), 601(a)]
Section 4.02. (a) The annual meeting of shareholders shall be held on the
second Tuesday of March of each year, at the hour of 10:30 A.M., provided,
however, that should said day fall on a legal holiday, then at the same time on
the next day thereafter which is not a legal holiday. At such meetings directors
shall be elected, reports on the affairs of the corporation shall be considered,
and any other proper matter may be presented and business transacted which is
within the power of the shareholders.
Failure to Hold [Corp. Code Secs. 177, 600(c)]
(b) If there is a failure to hold the annual meeting for a period of sixty
(60) days after the date designated therefor as provided in paragraph (a) of
this Section 4.02, any shareholder may apply to the superior court of the county
in which the corporation's principal executive office is located for an order
compelling the corporation to hold the meeting. The shares represented at the
meeting so held, either in person or by proxy, and entitled to vote thereat
shall constitute a quorum for the purpose of such meeting, notwithstanding any
provision of the Articles, these Bylaws, or the General Corporation Law to the
contrary.
Notice of Meetings [Corp. Code Secs. 212(b)(2), 601(a)]
Section 4.03. (a) Whenever shareholders are required or permitted to take
any action at a meeting, a written notice of the meeting shall be given to each
shareholder entitled to vote thereat, subject to the provisions of paragraph (f)
of this Section 4.03.
19
Method of Giving Notice [Corp. Code Secs. 212(b)(2), 601(b)]
(b) Notice of a shareholders' meeting shall be given either personally or
by mail, postage prepaid, or other means of written communication, addressed to
the shareholder at the address of such shareholder appearing on the books of the
corporation or given by the shareholder to the corporation for the purpose of
notice; or if no such address appears or is given, at the place where the
principal executive office of the corporation is located or by publication at
least once in a newspaper of general circulation in the county in which the
principal executive office is located. The notice shall be deemed to have been
given at the time when delivered personally or deposited in the mail or sent by
other means of written communication.
If any notice addressed to the shareholder at the address of such
shareholder appearing on the books of the corporation is returned to the
corporation by the United States Postal Service marked to indicate that the
United States Postal Service is unable to deliver it to the shareholder at such
address, all future notices shall be deemed to have been duly given without
further mailing if the same shall be available for the shareholder on written
demand of the shareholder at the principal executive office of the corporation
for a period of one year from the date of the giving of the notice to all other
shareholders.
Time of Notice [Corp. Code Secs. 212(b)(2), 601(a)]
(c) Notice of any meeting of the shareholders shall be sent by first-class
mail to each shareholder entitled thereto not less than ten (10) nor more that
sixty (60) days before the date of the meeting; provided, however, that at any
time that this corporation has outstanding shares held of record by 500 or more
persons (determined as provided in Section 605 of the California Corporations
Code) on the record date for the shareholders' meeting, notice may be sent by
third-class mail if sent not less than 30 days before the date of the meeting.
Contents of Notice [Corp. Code Sec. 601(a), (f)]
(d) The notice of any meeting of the shareholders shall state the place,
date, and hour of the meeting and: (1) in the case of a special meeting, the
general nature of the business to be transacted, and no other business may be
transacted; or (2) in the case of the annual meeting, those matters which the
Board, at the time of the mailing of the notice, intends to present for action
by the shareholders, but any proper matter may be presented at the meeting for
such action, provided, however, that any shareholder approval at a meeting,
other than unanimous approval by those
20
entitled to vote, pursuant to Section 310 (relating to contracts and
transactions between the corporation and any director or legal entity in which a
director has a material financial interest (see Sec. 2.23 of these Bylaws)),
Section 902 (relating to amendment of the articles), Section 1201 (relating to
reorganizations), Section 1900 (relating to voluntary dissolution), or Section
2007 (relating to distribution plans on dissolution) of the Corporations Code
shall be valid only if the general nature of the proposal so approved was stated
in the notice of meeting or in any written waiver of notice. The notice of any
meeting at which directors are to be elected must include the names of nominees
intended at the time of the notice to be presented by management for election.
Notice of Adjourned Meeting [Corp. Code Sec. 601(d)]
(e) When a shareholders' meeting is adjourned to another time or place,
notice need not be given of the adjourned meeting if the time and place thereof
are announced at the meeting at which the adjournment is taken, provided,
however, that if the adjournment is for more than forty-five (45) days or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting must be given to each shareholder of record
entitled to vote at the meeting. At the adjourned meeting the corporation may
transact any business which might have been transacted at the original meeting.
Waiver of Notice and Other Defects [Corp. Code Sec. 601(e), (f)]
(f) The transactions of any meeting of shareholders, however called and
noticed and wherever held, are as valid as though had at a meeting duly held
after regular call and notice, if a quorum (see Sec. 4.05 of these Bylaws) is
present either in person or by proxy and if, either before or after the meeting,
each of the persons entitled to vote, not present in person or by proxy, signs a
written waiver of notice, or a consent to the holding of the meeting, or an
approval of the minutes thereof. All such waivers, consents, and approvals must
be filed with the corporate records or made a part of the minutes of the
meeting. Except as provided in Paragraph (d) of this Section 4.03 and unless
otherwise provided in the Articles, neither the business to be transacted nor
the purpose of any regular or special meeting of shareholders need be specified
in any written waiver of notice, consent to the holding of the meeting, or
approval of the minutes of the meeting.
21
Attendance by a person at any such meeting also constitutes a waiver of
notice to that person if he or she fails to object at the beginning of the
meeting to the transaction of business because the meeting was not lawfully
called or convened, but such attendance does not constitute a waiver of the
right to object to the consideration of matters required to be included in the
notice but not so included if the objection is expressly made at the meeting.
Calling of Special Meeting [Corp. Code Secs. 177, 212(b)(2), 601(c)]
Section 4.04. (a) On request in writing to the Chairman of the Board, or
the President, or a Vice President, or the Secretary of the corporation by any
person (other than the Board) entitled to call a special meeting of the
shareholders (see paragraph (b) of this Section 4.04), the officer forthwith
must cause notice to be given to the shareholders entitled to vote that a
meeting will be held at a time requested by the person or persons calling the
meeting, not less than thirty-five (35) nor more than sixty (60) days after
receipt of the request. If the notice is not given within twenty (20) days after
receipt of the request, the persons entitled to call the meeting may give the
notice or they may apply to the superior court of the county in which the
principal executive office of the corporation is located or an order, after
notice to the corporation giving it an opportunity to be heard, summarily
ordering the giving of the notice.
Persons Entitled to Call Special Meetings
[Corp. Code Secs. 212(b)(2), 600(d)]
(b) Special meetings of the shareholders may be called by the Board of
Directors, the Chairman of the Board, the President, or the holders of shares
entitled to cast not less than ten (10) percent of the votes at the meeting.
Quorum of Shareholders [Corp. Code Secs. 112, 602(a)]
Section 4.05. (a) A majority of the shares entitled to vote, represented
in person or by proxy, shall constitute a quorum at a meeting of shareholders,
provided, however, that whenever shares are disqualified by the General
Corporations Law from voting on any matter, they shall not be considered
outstanding for the determination of a quorum at any meeting to act on that
matter under any other provision of the General Corporation Law or the Articles
or these Bylaws.
22
Loss of Quorum [Corp. Code Sec. 602(b)]
(b) The shareholders present at a duly called or held meeting at which a
quorum is present may continue to transact business until adjournment
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum, if any action taken (other than adjournment) is approved by at least a
majority of the shares required to constitute a quorum.
Adjournment for Lack of Quorum [Corp. Code Sec. 602(c)]
(c) In the absence of a quorum, any meeting of shareholders may be
adjourned from time to time by the vote of a majority of the shares represented
either in person or by proxy, but no other business may be transacted, except as
provided in paragraph (b) of this Section 4.05.
Effect of Vote [Corp. Code Secs. 112, 602(a)]
Section 4.06. If a quorum is present, the affirmative vote of the majority
of the shares represented at the meeting and entitled to vote on any matter
shall be the act of the shareholders, unless the vote of a greater number or
voting by classes is required by the General Corporation Law or the Articles,
and except as provided in paragraph (a) of Section 4.05 of these Bylaws,
provided, however, that whenever shares are disqualified by the General
Corporation Law from voting on any matter, they shall not be considered
outstanding for the determination of the required vote to approve action on that
matter under any other provision of the General Corporation Law or the Articles
or these Bylaws.
Election of Directors [Corp. Code Sec. 708(c), (e)]
Section 4.07. Elections for directors need not be by ballot unless a
shareholder demands election by ballot at the meeting and before the voting
begins. In any election of directors, the candidates receiving the highest
number of votes of the shares entitled to be voted for them up to the number of
directors to be elected by such shares are elected.
Votes Per Share-Voting of Fractional Shares
[Corp. Code Secs. 112, 407, 700(a)]
Section 4.08. Except as provided in Section 4.09 and except as may
otherwise be provided in the Articles, each outstanding share, regardless of
class, shall be entitled to one vote on each matter submitted to a vote of
shareholders. A certificate for a fractional share shall, but scrip or warrants
shall not unless otherwise provided therein, entitle the holder to exercise
voting rights.
23
Voting Multiple Shares [Corp. Code Sec. 700(b)]
Section 4.09. Any holder of shares entitled to vote on any matter may vote
part of the shares in favor of the proposal and refrain from voting the
remaining shares or vote them against the proposal, other than elections to
office, but, if the shareholder fails to specify the number of shares being
voted affirmatively, it will be conclusively presumed that the shareholder's
approving vote is with respect to all shares the shareholder is entitled to
vote.
Cumulative Voting [Corp. Code Sec. 708(a)-(c)]
Section 4.10. Every shareholder entitled to vote at any election of
directors may cumulate votes and give one candidate a number of votes equal to
the number of directors to be elected multiplied by the number of votes to which
the shareholder's shares are entitled, or distribute them on the same principle
among as many candidates as the shareholder thinks fit. But no shareholder shall
be entitled to cumulate votes (i.e., cast for any one or more candidates a
number of votes greater than the number of the shareholder's shares) unless such
candidate's or candidates' names have been placed in nomination prior to the
voting and the shareholder has given notice at the meeting prior to the voting
of the shareholder's intention to cumulate votes. If any one shareholder has
given such notice, all shareholders may cumulate their votes for candidates in
nomination.
Voting of Shares by Fiduciaries, Minors, or Entities
[Corp. Code Secs. 702-704]
Section 4.11. (a) The rights of the persons and entities specified in this
section to vote shares are governed by the provisions of this Section of the
Bylaws.
Personal Representative [Corp. Code Sec. 702(a)]
(b) Except as provided in paragraph (i) of this Section 4.11, shares held
by an administrator, executor, guardian, conservator, or custodian may be voted
by such holder either in person or by proxy, without a transfer of the shares
into the holder's name.
Trustee [Corp. Code Sec. 702(a)]
(c) Shares standing in the name of a trustee may be voted by the trustee,
either in person or by proxy, but no trustee shall be entitled to vote shares so
held without a transfer of them into the trustee's name.
24
Receiver [Corp. Code Sec. 702(b)]
(d) Shares standing in the name of a receiver may be voted by the
receiver. Shares held by or under the control of a receiver may be voted by the
receiver without their being transferred into the receiver's name if authority
to so vote them is contained in the court order appointing the receiver.
Pledgee [Corp. Code Sec. 702(c)]
(e) Subject to the provisions of Section 4.12 of these Bylaws and except
where otherwise agreed in writing between the parties, a shareholder whose
shares are pledged shall be entitled to vote such shares until they have been
transferred into the name of the pledgee, and thereafter the pledgee shall be
entitled to vote the shares so transferred.
Minor [Corp. Code Sec. 702(d)]
(f) Shares standing in the name of a minor may be voted and the
corporation may treat all rights incident thereto as exercisable by the minor,
in person or by proxy, whether or not the corporation has notice, actual or
constructive, or the nonage, unless a guardian of the minor's property has been
appointed and written notice of the appointment given to the corporation.
Corporation [Corp. Code Sec. 703(a)]
(g) Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent, or proxyholder as the bylaws of
such other corporation may prescribe or, in the absence of such provision, as
the board of directors of such other corporation may determine or, in the
absence of such determination, by the chairman of the board, president, or any
vice president of such other corporation, or by any other person authorized to
do so by the chairman of the board, president, or any vice president of such
other corporation. Shares which are purported to be voted or any proxy purported
to be executed in the name of a corporation (whether or not any title of the
person signing is indicated) shall be presumed to be voted or the proxy executed
in accordance with the foregoing provisions, unless the contrary is shown.
Subsidiary [Corp. Code Sec. 703(b)]
(h) Shares of the corporation owned by any subsidiary of the corporation
shall not be entitled to vote on any matter.
25
Corporate Fiduciary [Corp. Code Sec. 703(c)]
(i) Shares held by the corporation in a fiduciary capacity, and shares of
the corporation held in a fiduciary capacity by its subsidiary, if any, shall
not be entitled to vote on any matter, except to the extent that the settlor or
beneficial owner possesses and exercises a right to vote or to give the
corporation binding instructions as to how to vote such shares.
Shares in Names of Two or More Persons [Corp. Code Sec. 704]
(j) If shares stand of record in the names of two or more persons, whether
fiduciaries, members of a partnership, joint tenants, tenants in common, husband
and wife as community property, tenants by the entirety, voting trustees,
[persons entitled to vote under a shareholder voting agreement,] or otherwise,
or if two or more persons (including proxyholders) have the same fiduciary
relationship respecting the same shares, unless the Secretary of the corporation
is given written notice to the contrary and is furnished with a copy of the
instrument or order appointing them or creating the relationship wherein it is
so provided, their acts with respect to voting shall have the following effect:
(1) If only one votes, such act binds all.
(2) If more than one vote, the act of the majority so voting binds all.
(3) If more than one vote, but the vote is evenly split on any
particular matter, each faction may vote the securities in question
proportionately.
If the instrument so filed or the registration of the shares shows that
any such tenancy is held in unequal interests, a majority or even split for the
purpose of the above shall be a majority or even split in interest.
Proxies [Corp. Code Sec. 705]
Section 4.12. (a) Every person entitled to vote shares may authorize
another person or persons to act by proxy with respect to such shares. Except as
otherwise provided by written agreement between the parties, the recordholder of
shares which a person holds as pledgee or otherwise as security or which belong
to another must issue to the pledgor or to the owner of such shares, on demand
therefor and payment of necessary expenses thereof, a proxy to vote or take
other action thereon.
26
Presumptive Validity [Corp. Code Sec. 705(a)]
(b) Any proxy purporting to be executed in accordance with this Section
4.12 shall be presumptively valid.
Duration of Proxy [Corp. Code Sec. 705(b)]
(c) No proxy shall be valid after the expiration of eleven (11) months
from the date thereof unless otherwise provided in the proxy. Every proxy
continues in full force and effect until revoked by the person executing it
prior to the vote pursuant thereto, except as provided in paragraphs (f) and (g)
of this Section 4.12. The dates contained on the forms of proxy presumptively
determine the order of execution, regardless of the postmark dates on the
envelopes in which they are mailed.
Death or Incapacity of Maker [Corp. Code Sec. 705(c)]
(d) A proxy is not revoked by the death or incapacity of the maker, unless
(except as provided in paragraph (f) of this Section 4.12), before the vote is
counted, written notice of such death or incapacity is received by the
corporation.
Revocation of Proxy [Corp. Code Secs. 212(b)(3), 705(b)]
(e) Revocation of a proxy is effected by a writing delivered to the
corporation stating that the proxy is revoked or by a subsequent proxy executed
by, or as to any meeting by attendance at such meeting and voting in person by,
the person executing the proxy.
Proxy Providing for Irrevocability [Corp. Code Sec. 705(e)]
(f) A proxy which states that it is irrevocable is irrevocable for the
period specified therein (notwithstanding paragraph (d) of this Section 4.12)
when it is held by any of the following or a nominee of any of the following:
(1) A pledgee.
(2) A person who has purchased or agreed to purchase or holds an option
to purchase the shares or a person who has sold a portion of such
person's shares in the corporation to the maker of the proxy.
(3) A creditor or creditors of the corporation or the shareholder who
extended or continued credit to the corporation or the shareholder
in consideration of the proxy if the proxy states that it was given
in consideration of such extension or continuation of credit and the
name of the person extending or continuing credit.
27
(4) A person who has contracted to perform services as an employee of
the corporation, if a proxy is required by the contract of the
employment and if the proxy states that it was given in
consideration of such contract of employment, the name of the
employee, and the period of employment contracted for.
(5) A beneficiary of a trust with respect to shares held by the trust.
In addition, a proxy may be made irrevocable (notwithstanding paragraph
(d) of this Section 4.12) if it is given to secure the performance of a duty or
to protect a title, either legal or equitable, until the happening of events
which, by its terms, discharge the obligations secured by it.
When Irrevocable Proxy Is Revocable [Corp. Code Sec. 705(e), (f)]
(g) Notwithstanding the period of irrevocability specified in the proxy as
provided in paragraph (f) of this Section 4.12, the proxy becomes revocable when
the pledge is redeemed, the option or agreement to purchase is terminated, or
the seller no longer owns any shares of the corporation or dies, the debt of the
corporation or the shareholder is paid, the period of employment provided for in
the contract of employment has terminated or the agreement under section 706 of
the Corporation Code has terminated.
A proxy may be revoked, notwithstanding a provision making it irrevocable,
by a transferee of shares without knowledge of the existence of the provision
unless the existence of the proxy and its irrevocability appears on the
certificate representing such shares.
Form of Proxy or Written Consent [Corp. Code Sec. 604]
(h) Any form of proxy or written consent (see Section 4.16 of these
Bylaws) distributed to ten (10) or more shareholders must, if the outstanding
shares are held of record by one hundred (100) or more persons as determined
under Section 605 of the California Corporations Code, afford an opportunity on
the proxy or form of written consent to specify a choice between approval and
disapproval of each matter or group of related matters intended to be acted on
at the meeting for which the proxy is solicited or by such written consent,
other than elections to office, and must provide, subject to reasonable
specified conditions, that where the person solicited specifies a choice with
respect to any such matter the shares will be voted in accordance therewith.
28
In any election of directors, any form of proxy in which the directors to
be voted on are named therein as candidates and which is marked by a shareholder
"withhold" or otherwise marked in a manner indicating that the authority to vote
for the election of directors is withheld shall not be voted either for or
against the election of a director.
Failure to comply with this paragraph (h) does not invalidate any
corporate action taken, but may be the basis for challenging any proxy at a
meeting and any shareholder may sue in the superior court to compel compliance
therewith.
Directors' Determination of Execution and Use of Proxies
[Corp. Code Sec. 212(b)(3)]
(i) The Board of Directors may, in advance of any annual or special
meeting of the shareholders, prescribe additional regulations concerning the
manner of execution and filing of proxies and the validation of the same, which
are intended to be voted at any such meeting.
Voting Trust [Corp. Code Sec. 706(b)]
Section 4.13. (a) Shares may be transferred by written agreement to
trustees in order to confer on them the right to vote and otherwise represent
the shares for such period of time, not exceeding ten (10) years, as may be
specified in the agreement. At any time within two (2) years prior to the time
of expiration of any voting trust agreement as originally fixed or as last
extended as provided in this paragraph, one or more beneficiaries under the
voting trust agreement may, by written agreement and with the written consent of
the voting trustee or trustees, extend the duration of the voting trust
agreement with respect to their shares for an additional period not exceeding
ten (10) years from the expiration date of the trust as originally fixed or as
last extended as provided in this paragraph. A duplicate of the voting trust
agreement and any extension thereof must be filed with Secretary of the
corporation and shall be open to inspection by a shareholder, a holder of a
voting trust certificate, or the agent of either, on the same terms as the
record of shareholders of the corporation is open to inspection.
Effect of Section [Corp. Code Sec. 706(d)]
(b) This section of the Bylaws is not intended to invalidate any voting or
other agreement among shareholders or any irrevocable proxy meeting the
requirements of paragraph (f) of Section 4.12 of these Bylaws.
29
Inspectors of Election [Corp. Code Sec. 707]
Appointment [Corp. Code Sec. 707(a)]
Section 4.14. (a) In advance of any meeting of shareholders the Board may
appoint inspectors of election to act at the meeting and any adjournment
thereof. If inspectors of election are not so appointed, or if any persons so
appointed fail to appear on refuse to act, the chairman of any meeting of
shareholders may, and on the request of any shareholder or a shareholder's proxy
must, appoint inspectors of election (or persons to replace those who so fail or
refuse) at the meeting.
Number [Corp. Code Sec. 707(a)]
(b) The number of inspectors shall be either one or three. If the
inspector or inspectors are appointed at a meeting on the request of one or more
shareholders or proxies, the majority of shares represented in person or by
proxy shall determine whether one or three inspectors are to be appointed.
Duties [Corp. Code Sec. 707(b), (c)]
(c) The inspector or inspectors of election shall:
(1) Determine the number of shares outstanding and the voting power of
each, the shares represented at the meeting, the existence of a
quorum, and the authenticity, validity, and effect of proxies.
(2) Receive votes, ballots, or consents.
(3) Hear and determine all challenges and questions in any way arising
in connection with the right to vote.
(4) Count and tabulate all votes or consents.
(5) Determine when the polls shall close.
(6) Determine the result of the election.
(7) Do such acts as may be proper to conduct the election or vote with
fairness to all shareholders.
(8) Perform his, her, or their duties impartially, in good faith, to the
best of his, her, or their ability and as expeditiously as is
practical.
Decision, Act, or Certificate [Corp. Code Sec. 707(c)]
(d) If there are three inspectors of election, the decision, act, or
certificate of a majority is effective in all respects as the decision, act, or
certificate of all. Any report or certificate made by the inspectors of election
is prima facie evidence of the facts stated in it.
30
Conduct of Meetings [Corp. Code Sec. 212(b)(2)]
Section 4.15. At every meeting of the shareholders, the President of the
corporation, or in his absence the Vice President designated by the President,
or in the absence of such designation a chairman (who shall be one of the Vice
Presidents, if any is present) chosen by a majority in interest of the
shareholders of the corporation present in person or by proxy and entitled to
vote, shall act as chairman. The Secretary of the corporation, or in the
Secretary's absence and Assistant Secretary, if any, shall act as Secretary of
all meetings of the shareholders. In the absence at such meeting of the
Secretary and all Assistant Secretaries, if any, the chairman may appoint
another person to act as secretary for the meeting.
Action Without a Meeting [Corp. Code Sec. 603]
When Authorized [Corp. Code Sec. 603(a), (d)]
Section 4.16. (a) Unless otherwise provided in the Articles, any action
which may be taken at any annual or special meeting of shareholders may be taken
without a meeting and without prior notice, if a consent in writing, setting
forth the action so taken, shall be signed by the holders of outstanding shares
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted, provided, however, that directors may not be
elected by written consent except by the unanimous written consent of all shares
entitled to vote for the election of directors.
Notice of Shareholder Approval [Corp. Code Sec. 603(b)]
(b) Unless the consents of all shareholders entitled to vote have been
solicited in writing, notice to those shareholders entitled to vote who have not
consented in writing must be given as follows:
(1) Notice of any shareholder approval pursuant to Section 310 (relating
to contract or transaction between corporation and its director or
legal entity in which one or more of its directors has a material
financial interest (see sec. 2.23 of these Bylaws)), Section 317
(relating to indemnification by corporation of its director,
officer, employee, or agent arising out of court, administrative, or
investigative proceeding (see secs. 2.25-2.32 of these Bylaws)),
Section 1201 (relating to reorganizations), or Section 2007
(relating to plan of distribution on dissolution) of the California
Corporations Code without a meeting by less than unanimous written
consent must be given at least ten (10)
31
days before the consummation of the action authorized by such
approval; and
(2) Prompt notice must be given of the taking of any other corporate
action approved by shareholders without a meeting by less than
unanimous written consent.
Paragraph (b) of Section 4.03 of these Bylaws, relating to the method of
giving notice, applies to the notice provided by this section.
Revocation of Consent [Corp. Code Sec. 603 (c)]
(c) Any shareholder giving a written consent, or the shareholder's
proxyholders, or a transferee of the shares, or a personal representative of the
shareholder, or their respective proxyholders, may revoke the consent by a
writing received by the corporation prior to the time that written consents of
the number of shares required to authorize the proposed action have been filed
with the Secretary of the corporation, but may not do so thereafter. The
revocation is effective on its receipt by the Secretary of the corporation.
32
ARTICLE V. OFFICERS
Number and Titles [Corp. Code Secs. 212(b)(6), 312(a)]
Section 5.01. The officers of the corporation shall be a Chairman of the
Board or a President or both a Chairman of the Board and a President, a
Secretary, and a Chief Financial Officer who may also be called Treasurer. The
corporation may also have, at the discretion of the Board, any other officers
that may be appointed in accordance with the provisions of Section 5.03 of this
Article. One person may hold two or more offices. In its discretion, the Board
of Directors may leave unfilled, for any period it may fix, any office except
the offices of Chairman of the Board or President, Secretary, and Chief
Financial Officer.
Appointment [Corp. Code Secs. 212(b)(6), 312(b)]
Section 5.02. The officers of the corporation, except those officers that
are appointed in accordance with the provisions of Sections 5.03 or 5.05 of this
Article, shall be chosen annually by the Board. Each officer shall serve at the
pleasure of the Board, subject to any rights that he or she has under any
employment contract with the corporation, and shall hold office until the
appointment of his or her successor, or until his or her resignation, removal
from office pursuant to Section 5.04, or other disqualification.
Other Officers [Corp. Code Secs. 212(b)(6), 312(a)]
Section 5.03. The Board may appoint any officers that may be necessary to
enable the corporation to sign instruments and share certificates including one
or more Vice Presidents, one or more Assistant Secretaries, and one or more
Assistant Treasurers. Each such officer shall hold office for the period, have
the authority, and perform duties that the Board may, by resolution, from time
to time determine.
Removal and Resignation [Corp. Code Secs. 212(b)(6), 312(b)]
Section 5.04. Any officer may be removed, either with or without cause,
subject to any rights of the officer under any employment contract with the
corporation, by the vote of the Board at any regular or special meeting of the
Board, or by the unanimous written consent of the directors then in office
without a meeting. Any officer may resign at any time without prejudice to any
rights of the corporation under any contract to which the officer is a party by
giving written notice to the Chairman of the Board, if there is such an officer,
or to the President, or to the Secretary of the corporation. Any such
resignation shall take effect on the date the notice is received unless a later
effective date is
33
specified, in which case the resignation is effective on the specified date.
Unless otherwise specified in the notice, acceptance of the resignation by the
Board shall not be necessary to make it effective.
Vacancies [Corp. Code Secs. 212(b)(6), 312(a)]
Section 5.05. If the office of Chairman of the Board, President,
Secretary, or Chief Financial Officer becomes vacant by reason of death,
resignation, removal, or otherwise, the Board shall fill it by appointing a
successor officer [who shall hold the office for the unexpired term]. If any
other office becomes vacant, the Board may, in its discretion, leave it unfilled
for any period that it may fix or it may appoint a successor officer to fill the
vacancy.
Chairman of the Board [Corp. Code Secs. 212(b)(6), 312(a), 416(a)]
Section 5.06. The Chairman of the Board, if there is such an officer,
shall, if present, preside at all meetings of the Board and exercise and perform
any other powers and duties that are assigned to him or her by the Board or
prescribed by law or by these Bylaws. When so directed by the Board, the
Chairman shall, with the Secretary or an Assistant Secretary, if any, or the
Chief Financial Officer or Assistant Treasurer, if any, sign share certificates.
Signatures on the certificates may be facsimile.
President [Corp. Code Secs. 212(b)(6), 312(a)]
Section 5.07. Subject to the supervisory powers, if any, that may be given
by the Board to the Chairman of the Board, if there is such an officer, the
President shall be the chief executive officer of the corporation and, except as
otherwise provided in these Bylaws, shall have: (1) general supervision,
direction, and control of the business and officers of the corporation; (2) the
general powers and duties of management usually vested in the office of
President of a corporation; and (3) any other powers and duties prescribed by
the Board or by these Bylaws. Within this authority and in the course of his or
her duties, the President shall:
Meetings
(a) Preside at all meetings of the shareholders, preside at Board Meetings
in the absence of the Chairman of the Board, or if there is none, at all
meetings of the Board, and be ex officio a member of all Board committees.
34
Share Certificates [Corp. Code Sec. 416(a)]
(b) Except when otherwise directed by the Board, sign, with the Secretary
or an Assistant Secretary, if any, or the Chief Financial Officer or Assistant
Treasurer, if any, all share certificates of the corporation. Signatures on the
certificates may be facsimile.
Instruments
(c) Sign all corporate instruments on behalf of the corporation as
provided in Section 6.02 of Article VI of these Bylaws.
Hire and Fire Employees
(d) Subject to direction from the Board, appoint and remove, employ and
discharge, and prescribe the duties and fix the compensation of all agents and
employees of the corporation other than the officers. These functions may,
however, be delegated by the President, or the Board, to specified persons in
the various levels of management.
Voting Shares of Other Corporations [Corp. Code Sec. 703(a)]
(e) Unless otherwise directed by the Board and subject to its control,
attend in person and, unless prohibited by law, act and vote, on behalf of this
corporation, at all meetings of the shareholders of any corporation in which
this corporation holds shares.
Vice President [Corp. Code Secs. 212(b)(6), 312(a)]
Section 5.08. In the absence or disability of the President, the Vice
President or the Vice Presidents if there are more than one in order of their
rank as fixed by the Board, or if not ranked the Vice President designated by
the Board, shall perform all the duties of the President and shall for this
purpose act within the President's scope of authority. The Vice President or the
Vice Presidents shall have any other powers and perform any other duties
prescribed for them respectively by the Board or by these Bylaws.
35
Secretary [Corp. Code Secs. 212(b)(6), 312(a)]
Section 5.09. The Secretary shall:
Seal [Corp. Code Sec. 207(a)]
(a) Have custody of the corporate seal and shall affix it in appropriate
cases to all corporate instruments.
Records, Reports, and Statements
(b) Have custody of the records of the corporation and ensure that the
books, reports, statements, certificates, and all other documents and records
required by law are properly kept and filed.
Notices
(c) Ensure that all notices are given in accordance with the provisions of
these Bylaws or as required by law. In case of the Secretary's absence,
disability, or neglect or refusal to act, notice may be given and served or
caused to be served by an Assistant Secretary, if any, by the President or a
Vice President of the corporation, or by the Board of Directors.
Minutes
(d) Act as Secretary at all meetings of shareholders and of the Board and
record, or cause to be recorded, in the minute book all actions taken at those
meetings. In case of the Secretary's absence, disability, neglect of duties, or
refusal to act, this duty may be performed by an Assistant Secretary, if any, or
any other person appointed by the person presiding at the meeting.
Minute Book [Corp. Code Sec. 1500]
(e) Keep a written book of minutes, at the corporation's principal
executive office or other place designated by the Board, of all proceedings of
the corporation's shareholders, Board, and Board committees, including: the time
and place of meeting; whether the meeting was regular or special; the
authorization for any special meeting; the type of notice given, the names of
the persons attending Board and committee meetings; the number of shares present
or represented at shareholder meetings; and the proceedings of the meeting.
Articles of Incorporation [see Corp. Code Sec. 209]
(f) Keep the original or a copy of the Articles of Incorporation,
certified by the Secretary of State, with all amendments in the minute book.
36
Bylaws [Corp. Code Sec. 213]
(g) Keep at the corporation's principal executive office the original or a
copy of these Bylaws to date, that shall be open to inspection by the
shareholders at all reasonable times during office hours.
Record of Shareholders [Corp. Code Sec. 1500]
(h) Keep at the corporation's principal executive office or at the office
of its transfer agent or registrar in California a record of the corporation's
shareholders, showing the names and addresses of all shareholders and the number
and class of shares held by each.
Certify Records [Corp. Code Sec. 314]
(i) When requested to do so by the Board, any director individually, a
Board committee, or the President or other officer of this corporation, or when
so required by law, certify as a true copy a copy of the Bylaws of the
corporation, or of the minutes of any meeting of the incorporators,
shareholders, directors, Board committee, or other, or of any resolution adopted
by the Board, a Board committee, or the shareholders. This duty may be performed
by any Assistant Secretary of the corporation.
Share Certificates [Corp. Code Sec. 416(a)]
(j) Sign, with the Chairman of the Board or the Vice Chairman, if any, or
the President or a Vice-President, all share certificates of the corporation.
In lieu of signing by the Secretary, the certificates may be signed by an
Assistant Secretary, if any, or by the Chief Financial Officer or Assistant
Treasurer, if any, of the corporation. Signatures on the certificates may be
facsimile.
Exhibit Record of Shareholders [Corp. Code Sec. 1600(a), (c), (d)]
(k) Make the record of shareholders available during usual business hours
for inspection and copying:
(1) To any shareholder or shareholders who hold at least 5 percent in
the aggregate of the outstanding voting shares of a corporation, or
who hold at least 1 percent of those voting shares and who have
filed a Schedule 14B with the United States Securities and Exchange
Commission relating to the election of directors of the corporation,
on five business days' prior written demand on the corporation; and
37
(2) To any shareholder or holder of a voting trust certificate on
written demand on the corporation for a purpose reasonably related
to that holder's interests as a shareholder or holder of a voting
trust certificate.
Any inspection and copying under this paragraph may be made in person or
by agent or attorney.
Exhibit Minutes to Shareholder [Corp. Code Sec. 1601]
(1) On the written demand on the corporation of any shareholder or holder
of a voting trust certificate, make available for inspection at any reasonable
time during usual business hours to that shareholder or holder of such voting
trust certificate for a purpose reasonably related to that holder's interests as
a shareholder or as the holder of that voting trust certificate, or to his or
her agent or attorney, the minutes of any proceedings of the shareholders, the
Board, or Board committee, or any accounting books and records in the
Secretary's custody. This right of inspection includes the right to copy and
make extracts.
Exhibit Records to Director [Corp. Code Sec. 1602]
(m) Make available at any reasonable time to any director who requests, or
to his or her agent or attorney, for inspection all books, records, and
documents of every kind of the corporation that the Secretary is charged by
these Bylaws with maintaining and/or keeping or that are in the Secretary's
custody. This right of inspection includes the right to copy and make extracts.
Other Duties
(n) Perform any and all other functions and duties that may be specified
in other sections of these Bylaws and any other duties that may from time to
time be assigned by the Board.
Absence of Secretary
(o) In case of the Secretary's absence, disability, neglect of duties, or
refusal to act, the Assistant Secretary, or if there is none, the Chief
Financial Officer acting as Assistant Secretary may perform all of the
functions and duties of the Secretary. In case of the absence, disability,
neglect of duties, or refusal to act, of the Assistant Secretary or Chief
Financial Officer, as the case may be, as well as the Secretary, then any person
authorized by the President, Vice President, or Board of Directors shall perform
the functions and duties of the Secretary.
38
Assistant Secretary [Corp. Code Secs. 212(b)(6), 312(a)]
Section 5.10. If the Board appoints one or more Assistant Secretaries,
then, at the request of the Secretary or in case of the Secretary's absence or
disability, the Assistant Secretary, or, if there is more than one, the
Assistant Secretary designated by the Secretary, shall perform all the duties of
the Secretary, and shall for this purpose act within the Secretary's scope of
authority. The Assistant Secretary or Assistant Secretaries shall also perform
any other duties that from time to time may be assigned to them by the Board or
by the Secretary.
Chief Financial Officer [Corp. Code Secs. 212(b)(6), 312(a)]
Section 5.11. The Chief Financial Officer shall:
Funds--Custody and Deposit
(a) Have charge and custody of, and be responsible for, all funds and
securities of the corporation, and deposit all the funds in the name of the
corporation in the banks, trust companies, or other depositaries selected by the
Board.
Funds--Receipt
(b) Receive, and give receipt for, moneys due and payable to the
corporation from any source whatever.
Funds--Disbursement
(c) Disburse or cause to be disbursed, the funds of the corporation as may
be directed by the Board, taking proper vouchers for those disbursements.
Maintain Accounts [Corp. Code Sec. 1500]
(d) Keep and maintain adequate and correct books and records of account
either in written form or in any other form capable of being converted into
written form.
Reports to President and Directors
(e) Render to the President and directors, whenever they request it, an
account of all transactions as Chief Financial Officer and of the financial
condition of the corporation.
39
Financial Reports to Shareholders
[Corp. Code Secs. 114, 1501(a),(c),(d)]
(f) Take the following actions with respect to financial reports:
(1) Prepare, or cause to be prepared, the balance sheet, income
statement, and statement of changes in the corporation's financial
position for the fiscal year to be included in the annual report to
shareholders, and either ensure that the statements are accompanied
by a report on them of independent accountants or, if there is no
accountant's report, certify that the statements were prepared
without audit from the books and records of the corporation.
(2) On the written request of any shareholder or shareholders holding at
least 5 percent of the outstanding shares of any class, prepare, or
cause to be prepared, and deliver or mail to the person making the
request within 30 days after the request an income statement of the
corporation for the three-month, six-month, or nine-month period
of the current fiscal year ended more than 30 days prior to the date
of the request and a balance sheet of the corporation as of the end
of that period and, if no annual report for the last fiscal year was
sent to shareholders, the statements required by clause (1) of this
paragraph.
(3) Keep on file in the corporation's principal office for a period of
12 months a copy of the statements referred to in clause (2) of this
paragraph and exhibit them at all reasonable times to any
shareholder demanding an examination of them or mail a copy of them
to that shareholder.
(4) Either cause the quarterly income statements and balance sheets
referred to in clause (2) of this paragraph to be accompanied by the
report on the statements prepared by independent accountants engaged
by the corporation or, if there is no such report, certify that the
statements were prepared without audit from the books and records of
the corporation.
(5) Prepare the financial statements, balance sheets, income statements,
and statements of changes in financial position referred to in this
paragraph, or have them prepared, in accordance with generally
accepted accounting principles.
Exhibit Accounts to Shareholders [Corp. Code Sec. 1601]
(g) On the written demand on the corporation of any shareholder or holder
of a voting trust certificate, exhibit for inspection at any reasonable time
during usual business hours to
40
that shareholder or holder of such voting trust certificate for a purpose
reasonably related to that holder's interests as a shareholder or as the holder
of such voting trust certificate, or to his or her agent or attorney any or all
of the accounting books and records of the corporation. This right of inspection
includes the right to copy and make extracts.
Exhibit Accounts to Directors [Corp. Code Sec. 1602]
(h) Exhibit at any reasonable time to any director of the corporation who
so requests, or to his or her agent or attorney, for inspection any and all
books, records, and documents of every kind that the Chief Financial Officer is
charged by these Bylaws with maintaining and/or keeping or that are in the Chief
Financial Officer's custody. This right of inspection includes the right to copy
and make extracts.
Share Certificates [Corp. Code Sec. 416(a)]
(i) Sign, with the Chairman of the Board or Vice Chairman, if any, or the
President or a Vice President, all share certificates of the corporation. In
lieu of signing by the Chief Financial Officer, those certificates may be signed
by an Assistant Treasurer, if any, or by the Secretary or by an Assistant
Secretary, if any, of the corporation. Signatures on the certificates may be
facsimile.
Bond
(j) If required by the Board or the President, give to the corporation a
bond, with one or more sureties or a surety company, in a sum satisfactory to
the Board, for the faithful performance of the duties as Chief Financial Officer
and for the restoration to the corporation, in the event of the Chief Financial
Officer's death, resignation, retirement, or removal from office, of all books,
papers, vouchers, money, and other property of whatever kind in his or her
possession or under his or her control belonging to the corporation.
Other Duties
(k) Perform any and all other functions and duties required of the Chief
Financial Officer that may be specified in other sections of these Bylaws and,
in general, perform all the duties incident to the office of Chief Financial
Officer and such other duties as from time to time may be assigned by the Board.
41
Absence of Chief Financial Officer
(1) In case of the Chief Financial Officer's absence, disability, refusal
to act, or neglect of duties, the Assistant Treasurer, or if there is none, the
Secretary acting as Assistant Treasurer may perform all of the functions and
duties of the Chief Financial Officer. In case of the absence, disability,
refusal to act, or neglect of duties, of the Assistant Treasurer or Secretary,
as the case may be, as well as of the Chief Financial Officer, then any person
authorized by the President or Vice President or by the Board shall perform the
functions and duties of the Chief Financial Officer.
Assistant Treasurer [Corp. Code Secs. 212(b)(6), 312(a)]
Section 5.12. If the Board appoints one or more Assistant Treasurers they
shall, if so required by the Board, each give a bond for the faithful discharge
of his or her respective duties in the sum, and with the sureties, as the Board
shall require. At the request of the Chief Financial Officer or in the case of
the Chief Financial Officer's absence or disability, the Assistant Treasurer
shall perform all the duties of the Chief Financial Officer and for these
purposes shall act within the Chief Financial Officer's scope of authority. If
there is more than one Assistant Treasurer, the Assistant Treasurer designated
by the Chief Financial Officer, or, if there has been no such designation, the
Assistant Treasurer designated by the Board, shall perform these duties. The
Assistant Treasurer or Assistant Treasurers shall also perform any other duties
that may from time to time be assigned to them by the Board of Directors or by
the Chief Financial Officer.
Compensation [Corp. Code Sec. 212(b)(6)]
Section 5.13. The officers of the corporation shall receive the salaries
and other compensation that are fixed from time to time by the Board, and no
officer shall be prevented from receiving that salary and compensation by reason
of the fact that he or she is also a director of the corporation.
42
ARTICLE VI. EXECUTION OF INSTRUMENTS
AND DEPOSIT OF FUNDS
Limitations [see Corp. Code Sec. 313]
Section 6.01. Except as otherwise provided in these Bylaws, the Board may,
by duly adopted resolution, authorize any officer or agent of the corporation to
enter into any contract, or to execute and deliver any instrument, in the name
of and on behalf of this corporation. Authorization may be general or may be
confined to specified instances. Unless expressly authorized, no officer, agent,
or employee shall have any power or authority to bind the corporation by any
contract or engagement, or to pledge its credit, or to render it liable
pecuniarily for any purpose or in any amount.
Execution of Instrument and Papers
[see Corp. Code Secs. 313, 416(a)]
Section 6.02. Unless otherwise expressly required by the Board or by law,
deeds and other conveyances, promissory notes, deeds of trust, mortgages, and
other evidences of indebtedness of the corporation, and share certificates shall
be executed, signed, or endorsed by the Chairman of the Board, if any, or by the
President or a Vice President of the corporation, and by the Chief Financial
Officer or any Assistant Treasurer or the Secretary or any Assistant Secretary
of the corporation. Signatures on share certificates only may be facsimile.
Signing of Checks
Section 6.03. All checks, drafts, or other orders for the payment of money
issued in the name of the corporation shall be signed by the person or persons
and in the manner determined from time to time by resolution of the Board.
Deposit and Withdrawal of Funds
Section 6.04. (a) All funds of the corporation, including all checks,
drafts, or other orders for the payment of money payable to the corporation,
shall be deposited by the Chief Financial Officer from time to time to the
credit of the corporation with any banks, trust companies, or other depositaries
that the Board may select or that may be selected by any Board committee,
officer, or agent of the corporation to whom that power may be delegated from
time to time by the Board. All checks, drafts, or other orders for the payment
of money requiring endorsement by the corporation before deposit shall be
endorsed "for deposit only" by handstamped impression in the name of the
corporation.
(b) The withdrawal of funds from any such accounts may be made only by
check signed as provided in Section 6.03 of this Article.
43
ARTICLE VII. ISSUANCE OF SHARES AND
SHARE CERTIFICATES
Authority to Issue [Corp. Code Secs. 207(d), 400(a)]
Section 7.01. (a) The corporation may issue one or more classes or series
of shares or both, with full, limited, or no voting rights and with any other
rights, preferences, privileges, and restrictions that are stated or authorized
in its Articles of Incorporation. No denial of limitation of voting rights
shall, however, be effective unless at the time one or more classes or series of
outstanding shares or debt securities, singly or in the aggregate, are entitled
to full voting rights. No denial or limitation of divided or liquidation rights
shall be effective unless at the time one or more classes or series of
outstanding shares, singly or in the aggregate, are entitled to unlimited
dividend and liquidation rights.
Equality of Rights [Corp. Code Sec. 400(b)]
(b) All shares of any one class shall have the same voting, conversion,
and redemption rights and other rights, preferences, privileges, and
restrictions, unless the class is divided into series. If a class is divided
into series, all the shares of any one series shall have the same voting,
conversion, and redemption rights and other rights, preferences, privileges, and
restrictions.
Consideration [Corp. Code Sec. 409(a)(1), (b), (c)]
(c) Shares may be issued for any consideration that is determined from
time to time by the Board consisting of any or all of the following:
(1) Money paid;
(2) Labor done;
(3) Services actually rendered to the corporation or for its benefit or
in its formation or reorganization;
(4) Debts or securities canceled; and
(5) Tangible or intangible property actually received either by this
corporation or by any wholly owned subsidiary of this corporation.
Neither promissory notes of the purchaser (unless adequately secured by
collateral other than the shares acquired or unless permitted by Section 7.06 of
this Article) nor future services shall constitute payment or part payment of
shares of the corporation.
44
When shares are issued for any consideration other than money, the Board
must state by resolution its determination of the fair value of the
consideration to the corporation in monetary terms.
In the absence of fraud in the transaction, the judgement of the directors
as to the value of the consideration for shares shall be conclusive.
Share Dividends; Reclassification of Shares
[Corp. Code Sec. 409(a)(2)]
(d) Shares may also be issued as a share dividend or on a stock split,
reverse stock split, reclassification of outstanding shares into shares of
another class, conversion of outstanding shares into shares of another class,
exchange of outstanding shares for shares of another class, or other change
affecting outstanding shares.
Compliance with Corporate Securities Law
(e) The corporation shall not offer to sell or sell any security issued by
it, whether or not through underwriters, until the offer or sale has been
qualified by the California Commissioner of Corporations as required by the
Corporate Securities Law and the rules and regulations of the Commissioner,
unless the security or transaction is exempted from the qualification and the
applicable statutes and rules and regulations have been complied with.
Payment for Shares [Corp. Code Sec. 410]
(f) Every subscriber to shares and every person to whom shares are
originally issued is liable to the corporation for the full consideration agreed
to be paid for the shares. The full agreed consideration shall be paid prior to
or concurrently with the issuance of the shares, unless the shares are issued as
partly paid pursuant to Section 7.03 of this Article, in which case the
consideration shall be paid in accordance with the agreement of subscription or
purchase.
Shares as Deemed Fully Paid [Corp. Code Sec. 409(b)]
(g) Except as provided in section 7.03 of this Article, shares issued as
provided in paragraphs (c) and (d) of this Section or Section 7.06 of this
Article shall be declared and taken to be fully paid stock and not liable to any
further call, nor shall the holder thereof be liable for any further payments
under the provisions of the General Corporation Law.
45
Fractional Shares [Corp. Code Sec. 407]
Authority to Issue
Section 7.02. (a) The corporation may, if the Board so determines, issue
fractions of a share originally or on transfer.
Failure to Issue
(b) If the corporation does not issue fractions of a share, it shall, in
connection with any original issuance of shares:
(1) Arrange for the disposition of fractional interests by those
entitled to them;
(2) Pay in cash the fair value of fractions of a share as of the time
when those entitled to receive the fractions are determined
(provided, however, that the corporation may not pay cash for
fractional shares if that action would result in the cancellation of
more than 10 percent of the outstanding shares of any class); or
(3) Issue scrip or warrants in registered form, as certificated or
uncertificated securities, or in bearer form as certificated
securities, that shall entitle the holder to receive a certificate
for a full share on the surrender of the scrip or warrants
aggregating a full share. Scrip or warrants shall not, however,
unless they provide otherwise, entitle the holder to exercise voting
rights, to receive dividends thereon, or to participate in any of
the assets of the corporation in the event of liquidation.
Partly Paid Shares [Corp. Code Secs. 409(d), 410, 413]
Section 7.03. The corporation may, if the Board so determines, issue the
whole or any part of its shares as partly paid and subject to call for the
remainder of the consideration to be paid for them. If shares are so issued, the
corporation shall, on the declaration of any dividend on fully paid shares,
declare a dividend on partly paid shares of the same class, but only on the
basis of the percentage of the consideration actually paid on them.
A subscriber to partly paid shares is liable to the corporation as
provided in Section 7.01(f) of this Article, but a person holding shares as a
pledgee, executor, administrator, guardian, conservator, trustee, receiver, or
in any representative or fiduciary capacity is not personally liable for any
unpaid balance, although the estate and funds in the hands of the fiduciary or
representative are liable for any unpaid balance of the subscription price and
the shares are subject to sale therefor.
46
Options [Corp. Code Sec. 404]
Section 7.04. Either in connection with the issue, subscription, or sale
of any of its shares, bonds, debentures, notes, or other securities, or
independently of the foregoing, the corporation may, if so determined by the
Board, grant options to purchase or subscribe for shares of any class or series
on any terms and conditions that the Board may deem expedient. Option rights may
be transferable or nontransferable and separable or inseparable from other
securities of the corporation, as determined by the Board.
No Preemptive Rights [Corp. Code Sec. 406]
Section 7.05. Unless the Articles provide otherwise, the Board may issue
shares, options, or securities having conversion or option rights without first
offering them to shareholders of any class.
Employee Plans
Authority to Adopt [Corp. Code Secs. 207(f), 408(a)]
Section 7.06. (a) The corporation may, as determined by the Board, and
subject to the approval of the shareholders, as that term is defined in
California Corporations Code Section 153, adopt and carry out a stock purchase
plan or agreement, or stock option plan or agreement providing for the issue and
sale for any consideration that may be fixed of its unissued shares or of issued
shares acquired or to be acquired, to one or more of the employees or directors
of the corporation or of any subsidiary or parent of the corporation or to a
trustee on their behalf and for the payment of those shares in installments or
at one time, and may provide for aiding those persons in paying for those shares
by compensation for services rendered, promissory notes, or otherwise.
Includable Features [Corp. Code Sec. 408(b)]
(b) The plan or agreement may include, among other features, as determined
by the Board, the fixing of eligibility for participating in it; the class and
price of shares to be issued or sold under the plan or agreement; the number of
shares that may be subscribed for; the method of payment for the shares; the
reservation of title until full payment has been made; the effect of the
termination of employment; an option or obligation on the part of the
corporation to repurchase the shares on termination of employment, subject to
California Corporations Code Sections 500-511; restrictions on transfer of
shares; and the time limits of and termination of the plan.
47
Certificates of Determination
Execution of Officers' Certificate
[Corp. Code Secs. 173, 401(a)]
Section 7.07. (a) Before the corporation issues any share of any class or
series of which the rights, preferences, privileges, and restrictions, or any of
them, or the number of shares constituting any series or the designation of the
series, are not set forth in the Articles but are fixed in a resolution adopted
by the Board pursuant to authority given in its articles, an officers'
certificated, as that term is defined in California Corporations Code Section
173, setting forth a copy of the resolution and the number of shares of the
class or series, and stating that none of the shares of the class or series has
been issued, shall be executed and filed in the office of the California
Secretary of State.
Change in Rights [Corp. Code Sec. 401(b), (d), (e)]
(b) After any certificate of determination as provided in Paragraph (a) of
this section has been filed in the office of the California Secretary of State,
but before the corporation has issued any shares of the class or series covered
by it, the Board may alter or revoke any right, preference, privilege, or
restriction fixed or determined by the resolution set forth in it by the
adoption of another resolution appropriate for that purpose and the execution
and filing of an officers' certificate settling forth a copy of the resolution
and stating that none of the shares of the class or the series affected has been
issued
After shares of a class or series have been issued, the provisions of the
resolution set forth in a certificate of determination may be amended only by
the adoption and approval of an amendment in accordance with California
Corporations Code Sections 902, 903, or 904, and the filing of a certificate of
amendment in accordance with California Corporations Code Sections 905 and 908.
However, a certificate to increase or decrease the number of shares of a series
also may be filed as permitted by California Corporations Code Section 401(c),
as set forth in Paragraph (c) of this section.
When the Board effects a change in rights, the provision of the original
certificate of determination being amended must be identified in the amendment
in accordance with California Corporations Code Section 907(a).
48
Shareholder's Right to Share Certificate
[Corp. Code Sec. 416(a)]
Section 7.08. (a) Every holder of shares in the corporation shall be
entitled to have a certificate signed in the name of the corporation by the
Chairman of the Board, if any, or the President or a Vice President and by The
Chief Financial Officer or an Assistant Treasurer, or the Secretary or any
Assistant Secretary of the corporation, certifying the number of shares and the
class or series of shares owned by the shareholder. Any or all of the signatures
on the certificate may be facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed on a
certificate shall have ceased to be an officer, transfer agent, or registrar
before that certificate is issued, the certificate may be issued by the
corporation with the same effect as if that person were an officer, transfer
agent, or registrar at the date of issue.
Fractional Shares [Corp. Code Sec. 407]
(b) If the corporation issues fractions of a share originally or on
transfer, it shall issue certificates for those shares as provided in paragraph
(a) of this section. A certificate for a fractional share shall entitle the
holder to exercise voting rights, to receive dividends thereon, and to
participate in any of the assets of the corporation in the event of liquidation.
Partly Paid Shares [Corp. Code Sec. 409(d)]
(c) If the corporation issues partly paid shares, it shall issue
certificates for those shares as provided in paragraph (a) of this section.
Contents of Certificate [Corp. Code Secs. 409(d), 417, 418(a), (c), (d)]
Section 7.09. (a) The certificates shall contain the matter specified in
Section 7.08(a) of this Article. In addition, if the shares of the corporation
are classified or if any class of shares has two or more series, there shall
appear on the certificate one of the following:
(1) A statement of the rights, preferences, privileges, and restrictions
granted to or imposed on each class or series of shares authorized
to be issued and on the holders thereof.
(2) A summary of the rights, preferences, privileges, and restrictions
with reference to the provisions of the Articles of Incorporation
and any certificates of determination establishing those rights and
restrictions.
(3) A statement setting forth the office or agency of the
49
corporation from which shareholders may obtain, on request and
without charge, a copy of the statement referred to in clause (1) of
this paragraph.
(b) There shall also appear on the certificate (unless stated or
summarized under clause (1) or clause (2) of paragraph (a) of this section the
statements required by all of the following clauses to the extent applicable:
(1) The fact that the shares are subject to restrictions on transfer.
(2) If the shares are assessable or are not fully paid, a statement that
they are assessable or a statement of the total amount of
consideration to be paid and the amount paid, as required by
Corporations Code Section 409 (d).
(3) The fact that the shares are subject to a voting agreement under
California Corporations Code Section 706(a) or an irrevocable proxy
under California Corporations Code Section 705(e) or restrictions on
voting rights contractually imposed by the corporation.
(4) The fact that the shares are redeemable.
(5) The fact that the shares are convertible and the period for
conversion.
Exchange of Certificates
On Amendment of Articles or Otherwise
[Corp. Code Sec. 422(a)]
Section 7.10. (a) If the Articles are amended in any way affecting the
statements contained in the certificates for outstanding shares, or it becomes
desirable for any reason, in the discretion of the Board of Directors, to cancel
any outstanding certificate for shares and issue a new certificate therefor
conforming to the rights of the holder, the Board may order any holders of
outstanding certificates for shares to surrender and exchange them for new
certificates within a reasonable time to be fixed by the Board.
Contents of Order [Corp. Code Sec. 422(b)]
(b) The order may provide that a holder of any certificates so ordered to
be surrendered is not entitled to vote or to receive dividends or exercise any
of the other rights of shareholders until the holder has complied with the
order, but the order operates to suspend those rights only after notice and
until compliance. The duty of surrender of any outstanding certificates may also
be enforced by the corporation by civil action.
50
Lost, Stolen, or Destroyed Certificate; Issuance of New
Certificate [Corp. Code Sec. 419(a)]
Section 7.11. (a) The corporation may issue a new share certificate or a
new certificate for any other security in the place of any certificate therefore
issued by it, alleged to have been lost, stolen, or destroyed. The corporation
may require the owner of the lost, stolen, or destroyed certificate, or the
owner's legal representative, to give the corporation a bond (or other adequate
security) sufficient to indemnify it against any claim that may be made against
it (including any expense or liability) on account of the alleged loss, theft,
or destruction of any certificate or the issuance of a new certificate.
Purchase by Bona Fide Purchaser
[Com. Code Sec. 8405(3)]
(b) If after a new security has been issued for a lost, destroyed, or
stolen security, a bona fide purchaser of the original security presents it for
registration or transfer, the corporation must register the transfer unless
registration would result in overissue, in which event the corporation's
liability is that set forth in the last paragraph of Section 8.03 of Article
VIII of these Bylaws. In addition to any rights on the indemnity bond, the
corporation may recover the new security from the person to whom it was issued
or any person taking under him or her except a bona fide purchaser.
Alternative System in Lieu of Certificates
[Corp. Code Sec. 416(b)]
Section 7.12. Notwithstanding the provisions of paragraph (a), Section
7.08, of this Article VII, the corporation may adopt a system of issuance,
recordation, and transfer of its shares by electronic or other means not
involving any issuance of certificates, including provisions for notice to
purchasers in substitution for the required statements on the certificates under
paragraphs (a) and (b) of Section 7.09 of this Article VII, which system has
been approved by the United States Securities and Exchange Commission, or which
is authorized in any statute of the United States, or is in accordance with
Division 8 of the California Commercial Code.
51
ARTICLE VIII. TRANSFER OF SHARES
Duty of Corporation [Com. Code Sec. 8401(1)]
Section 8.01. When a security in registered form is presented to the
corporation with a request to register transfer, the corporation is under a duty
to register the transfer as required if:
(a) The security is indorsed by the appropriate person or persons;
(b) Reasonable assurance is given that those indorsements are genuine and
effective;
(c) The corporation has no duty to inquire into adverse claims or has
discharged any such duty; and
(d) Any applicable law relating to the collection of taxes has been
complied with.
Nobility of Corporation
Registration of Transfer [Com. Code Sec. 8404(2)]
Section 8.02. (a) Except as otherwise provided in any law relating to the
collection of taxes, the corporation is not liable to the owner or any other
person suffering loss as a result of the registration of a transfer of a
security if:
(1) There were on or with the security the necessary indorsements; and
(2) The corporation had no duty to inquire into adverse claims or has
discharged any such duty.
Failure to Notify Corporation of Lost, Destroyed, or Stolen
Security [Com. Code Sec. 8405(1)]
(b) Where a security has been lost, apparently destroyed, or wrongfully
taken and the owner fails to notify the corporation of that fact within a
reasonable time after he or she has notice of it and the corporation registers a
transfer of the security before receiving such notification, the owner is
precluded from asserting against the corporation any claim for registering the
transfer or any claim to a new security.
52
Liability of Corporation [Com. Code Secs. 8104, 8404(2)]
Section 8.03. Where the corporation has registered a transfer of a
security to a person not entitled to it, the corporation on demand must deliver
a like security to the true owner unless:
(a) The registration was pursuant to paragraph (a) of Section 8.02 of this
Article VIII;
(b) The owner is precluded from asserting any claim for registering the
transfer as provided in paragraph (c) of Section 8.02 of this Article VIII; or
(c) Such delivery would result in overissue.
In this latter case, if an identical security which does not constitute an
overissue is reasonably available for purchase, the person entitled to such
issue may compel the corporation to purchase and deliver it to him or her
against surrender of the security, if any, which he or she holds; or if such a
security is not available for purchase, the person entitled to such issue may
recover from the corporation the purchase price such person or the last
purchaser for the value paid for it with interest from the date of the demand.
Liability on Transfer of Partly Paid Shares
Good Faith Purchaser [Corp. Code Sec. 411]
Section 8.04. (a) A transferee of shares for which the full agreed
consideration has not been paid to the corporation, who acquired them in good
faith, without knowledge that they were not paid in full or to the extent stated
on the certificate representing them, is liable only for the amount shown by the
certificate to be unpaid on the shares represented thereby, until transferee
transfers the shares to one who becomes liable therefor. The liability of any
holder of such shares who derives title through such a transferee and who is not
a party to any fraud affecting the issue of the shares is the same as that of
the transferee through whom title was derived.
Purchase With Knowledge [Corp. Code Sec. 412]
(b) Every transferee of partly paid shares who acquired them under a
certificate showing the fact of part payment, and every transferee of such
shares (other than a transferee who derives title through a holder in good faith
without knowledge and who is not party to any fraud affecting the issue of such
shares) who acquired them with actual knowledge that the full agreed
consideration had not been paid to the extent stated on the certificate
therefor, is personally liable to the corporation for
53
installments of the amount unpaid becoming due until the shares are transferred
to one who becomes liable therefor.
Transferor [Corp. Code Sec. 411, 412]
(c) In either case mentioned in paragraph (a) or (b) of this Section 8.04,
the transferor shall remain personally liable for the unpaid consideration if so
provided in the certificate or agreed on in writing.
54
ARTICLE IX. CORPORATE RECORDS,
REPORTS, AND SEAL
Minutes of Meetings [Corp. Code Sec. 1500]
Section 9.01. The corporation shall keep minutes in written form of the
proceedings of its shareholders, Board, and Board committees.
Books and Records of Account [Corp. Code Sec. 1500]
Section 9.02. The corporation shall keep adequate and correct books and
records of account either in written form or in any other form capable of being
converted into written form.
Record of Shareholders [Corp. Code Sec. 1500]
Section 9.03. The corporation shall keep at its principal executive
office, or at the office of its transfer agent or registrar, a record of its
shareholders, giving the names and addresses of all shareholders and the number
and class of shares held by each. Such record must be kept either in written
form or in any other form capable of being converted into written form.
Shareholders' Rights to Inspect Record of Shareholders
by Written Demand of Holders of Specified Percentage
of Shares [Corp. Code Sec. 1600(a)]
Section 9.04. (a) A shareholder or shareholders holding at least five (5)
percent in the aggregate of the outstanding shares of the corporation shall have
an absolute right to:
(1) Inspect a copy of the record of shareholders' names and addresses
and shareholdings during usual business hours on five (5) business
days' prior written demand on the corporation; and
(2) Obtain from the corporation's transfer agent, on written demand and
on the tender of its usual charges for such a list (the amount of
which charges shall be stated to the shareholder by the transfer
agent on request), a list of shareholders' names and addresses, who
are entitled to vote for the election of directors, and their
shareholdings, as of the most recent record date for which it has
been compiled or as of a date specified by the shareholders
subsequent to the date of the demand. The list must be made
available on or before the later of five (5) business days after the
demand is received or the date specified therein as the date as of
which the list is to be compiled. The corporation shall have the
responsibility to cause its transfer agent to comply with this
requirement.
55
By Written Demand of Any Shareholder
[Corp. Code Sec. 1600(c)]
(b) The record of shareholders shall also be open to inspection and
copying by any shareholder at any time during usual business hours on written
demand on the corporation, for a for purpose reasonably related to such holder's
interests as a shareholder.
Inspection by Agent or Attorney [Corp. Code Sec. 1600(d)]
(c) Any inspection and copying under this Section 9.04 may be made in
person or by agent or attorney.
Shareholders' Rights to Inspect Books of Account and
Minutes [Corp. Code Sec. 1601]
Section 9.05. The accounting books and records and minutes of proceedings
of the shareholders, Board, and Board committees of this corporation shall be
open to inspection on the written demand on the corporation of any shareholder
[or holder of a voting trust certificate] at any reasonable time during business
hours, for a purpose reasonably related to such holder's interest as a
shareholder. Such inspection may be made in person or by agent or attorney, and
the right of inspection includes the right to copy and make extracts.
Inspection by Directors [Corp. Code Sec. 1602]
Section 9.06. Every director of this corporation shall have the absolute
right at any reasonable time to inspect and copy all books, records, and
documents of every kind and to inspect the physical properties of this
corporation. The inspection may be made in person or by agent or attorney and
the right of inspection includes the right to copy and make extracts.
Annual Report
Section 9.07. (a) An annual report shall be prepared.
When Required [Corp. Code Secs. 113, 601(a), 1501(a)]
(b) The Board of Directors shall cause an annual report to be sent by
first-class mail, postage prepaid, to the shareholders not later than 120 days
after the close of the fiscal year and at least 15 days prior to the annual
meeting of shareholders to be held during the next fiscal year; provided,
however, that the annual report may be sent by third-class mail if it is sent to
shareholders at least 35 days prior to the annual meeting.
56
Contents [Corp. Code Sec. 15O1(a),(b)]
(c)(1) The annual report shall contain a balance sheet as of the end of
the fiscal year and an income statement and statement of changes in financial
position for the fiscal year, accompanied by any report of independent
accountants or, if there is no such report, the certificate of an authorized
officer of the corporation that the statements were prepared without an audit
from the books and records of the corporation.
(2) In addition, if the corporation is either not subject to the reporting
requirements of Section 13 of the Securities Exchange Act of 1934, or is
exempted from the reporting requirements by Section 12(g)(2) of that Act, the
annual report shall also describe briefly both of the following:
(i) Any transaction (excluding compensation of officers and directors)
during the previous fiscal year involving an amount in excess of
$40,000 (other than contracts let at competitive bid or services
rendered at prices regulated by law) to which the corporation [or
its parent or subsidiary] was a party and in which any director or
officer of the corporation [or of a subsidiary] or [(if known to the
corporation or its parent or subsidiary)] any holder of more than 10
percent of the outstanding voting shares of the corporation had a
direct or indirect material interest, naming the person and stating
the person's relationship to the corporation, the nature of the
person's interest in the transaction and, if practicable, the amount
of the interest; provided, that in the case of a transaction with a
partnership of which the person is a partner, only the interest of
the partnership need be stated; and provided further that no such
report need be made in the case of transactions approved by the
shareholders, as that term is defined in California Corporations
Code Section 153 (see Sec. 2.23 of these Bylaws).
(ii) The amount and circumstances of any indemnification or advances
aggregating more than ten thousand dollars paid during the fiscal
year to any officer or director of the corporation pursuant to
California Corporations Code Section 317 (see Secs. 2.25-2.31 of
these Bylaws); provided, that no such report need be made in the
case of indemnification approved by the shareholders, as that term
is defined in California Corporations Code Section 153, under
California Corporations Code Section 317 (e)(3)(see Sec. 2.28 of
these Bylaws).
57
Special Financial Statements to Shareholders
[Corp. Code Sec. 1501(c),(d)]
Section 9.08. (a) Any shareholder or shareholders holding at least 5
percent of the outstanding shares of any class of this corporation may make a
written request to the corporation for an income statement of the corporation
for the three-month, six-month, nine-month period of the current fiscal year
ended more than 30 days prior to the date of the request and a balance sheet of
the corporation as of the end of that period and, in addition, if no annual
report for the last fiscal year has been sent to shareholders, the statements
referred to in clause (1) of paragraph (c) of Section 9.07 of this Article IX
for the last fiscal year. The statement must be delivered or mailed to the
person making the request within 30 days thereafter. A copy of the statements
shall be kept on file in the principal office of the corporation for 12 months
and they shall be exhibited at all reasonable times to any shareholder demanding
an examination of them or a copy shall be mailed to that shareholder.
(b) The quarterly income statements and balance sheets referred to in this
Section 9.08 shall be accompanied by the report thereon, if any, of any
independent accountants engaged by the corporation or the certificate of an
authorized officer of the corporation that those financial statements were
prepared without audit from the books and records of the corporation.
Fiscal Year
Section 9.09. The fiscal year of the corporation shall begin on the first
day of January and end on the last day of December each year.
Corporate Seal [Corp. Code Sec. 207(a)]
Section 9.10. The Board shall adopt a corporate seal which shall be in the
following form and design:.
The Secretary of the corporation shall have custody of the seal and affix
it in appropriate cases to all corporate documents. Failure to affix the seal
does not, however, affect the validity of any instrument.
58
ARTICLE X. CERTIFICATION, INSPECTION,
AND AMENDMENT OF BYLAWS
Inspection and Certification of Bylaws
[Corp. Code Secs. 213, 314]
Section 10.01. The corporation shall keep at its principal executive
office in California the original or a copy of its Bylaws as amended to date,
which shall be open to inspection by the shareholders at all reasonable times
during office hours. The original or a copy of the Bylaws certified to be a true
copy by a person purporting to be the Secretary or an Assistant Secretary of the
corporation is prima facie evidence of the adoption of such bylaws and of the
matters stated in them.
Adoption, Amendment, Repeal of Bylaws by Shareholders
[Corp. Code Secs. 207(b), 211, 212]
Section 10.02. These Bylaws may, from time to time and at any time, be
amended or repealed, and new or additional bylaws adopted, by approval of the
outstanding shares of the corporation, as that term is defined in Section 152 of
the California Corporations Code, provided, however, that such bylaws may not
contain any provision in conflict with law or with the Articles of Incorporation
of the corporation and, provided further, that a bylaw reducing the number of
directors to a number less than five (5)(see Section 2.03 of Article II of these
Bylaws) cannot be adopted if the votes cast against its adoption at a meeting of
shareholders or the shares not consenting in the case of action by written
consent are equal to more than sixteen and two-thirds (16 2/3) percent of the
outstanding shares entitled to vote.
Adoption, Amendment, Repeal of Bylaws by Directors
[Corp. Code Secs. 211, 212]
Section 10.03. Subject to the right of the outstanding shares to adopt,
amend, or repeal bylaws (see Sec. 10.02 of these Bylaws) and to any restrictions
imposed by the Articles on the power of the Board to adopt, amend, or repeal
bylaws, these Bylaws may, from time to time and at any time, be amended or
repealed, and new or additional bylaws adopted, by approval of the Board of
Directors, provided, however, that such bylaws may not contain any provision in
conflict with law or with the Articles and, provided further, that after shares
are issued any bylaw changing the number or directors or changing from a fixed
to a variable Board may be adopted only by approval of the outstanding shares.
59
ARTICLE XI. CONSTRUCTION OF BYLAWS
Section 11.01. Unless otherwise stated in these Bylaws or unless the
context otherwise requires, the definitions contained in the General Corporation
Law shall govern the construction of these Bylaws. Without limiting the
generality of the foregoing, the masculine gender includes the feminine and the
neuter, one singular number includes the plural and the plural number includes
the singular, and the word "person" includes a corporation or other entity as
well as a natural person.
CERTIFICATE OF SECRETARY [Corp. Code Sec. 314]
I, the undersigned, do hereby certify:
1. That I am the Secretary of Park Avenue Publishing, Inc., a California
corporation; and
2. That the foregoing Bylaws, consisting of eleven articles and 60 pages,
constitute the Bylaws of said corporation as duly approved at a meeting of the
Board of Directors duly held on 25 day of January, 1991, at Pomona., CA.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
seal of the corporation on 25 day of January, 1991.
/s/ Enedina L. Lopez
-------------------------------
Enedina L. Lopez, Secretary
60
TABLE OF CONTENTS
ARTICLE I. OFFICES ........................................................ 1
Principal Executive Office ........................................... 1
Other Offices ........................................................ 1
ARTICLE II. DIRECTORS ..................................................... 2
Definitions .......................................................... 2
"Board" ......................................................... 2
"Directors" ..................................................... 2
Responsibility of Board .............................................. 2
Number of Directors .................................................. 2
Election and Term of Office .......................................... 2
Resignation .......................................................... 3
Vacancies ............................................................ 3
When Vacancy occurs ............................................. 3
Declaration of Vacancy .......................................... 3
Removal of Directors by Shares .................................. 3
Removal by Court ................................................ 4
Reduction of Authorized Number of Directors ..................... 4
Provisions Exclusive ............................................ 4
Filling Vacancies .................................................... 4
By Board ........................................................ 4
By Shareholders ................................................. 5
By Special Meeting .............................................. 5
Call of Meetings ..................................................... 5
Place of Meetings .................................................... 5
Time of Regular Meetings ............................................. 6
Notice of Meetings ................................................... 6
Waiver of Notice ..................................................... 6
Quorum ............................................................... 6
Transactions of Board ................................................ 6
Withdrawal of Quorum ................................................. 7
Adjournment .......................................................... 7
Conduct of Meetings .................................................. 7
Telephone Participation .............................................. 7
Action Without Meeting ............................................... 7
Duties of Directors .................................................. 8
Compensation ......................................................... 8
Transactions With Corporation ........................................ 9
Liability of Directors ............................................... 10
Indemnification ...................................................... 11
Definitions ..................................................... 11
Power to Indemnify ................................................... 11
Expenses of Successful Agent ......................................... 12
Determination That Indemnification Is Proper ......................... 13
Advance of Expenses .................................................. 13
Nonexclusive Provisions .............................................. 13
Limitation on Indemnification ........................................ 14
Insurance ............................................................ 14
61
Board Committees ..................................................... 15
Authority to Appoint ............................................ 15
Authority of Committee .......................................... 15
Applicability of Other Sections ................................. 16
ARTICLE III. DETERMINING SHAREHOLDERS OF RECORD ........................... 17
Record Date Fixed by Board ...................................... 17
Record Date Not Fixed ........................................... 17
Record Date for Adjourned Meeting ............................... 17
Rights of Shareholders of Record ................................ 18
ARTICLE IV. SHAREHOLDERS' MEETINGS ........................................ 19
Place of Meetings .................................................... 19
Annual Meeting ....................................................... 19
Time of Meeting; Business Transacted ............................ 19
Failure to Hold ................................................. 19
Notice of Meetings ................................................... 19
Method of Giving Notice ......................................... 20
Time of Notice .................................................. 20
Contents of Notice .............................................. 20
Notice of Adjourned Meeting ..................................... 21
Waiver of Notice and Other Defects .............................. 21
Calling of Special Meeting ........................................... 22
Persons Entitled to Call Special Meetings ....................... 22
Quorum of Shareholders ............................................... 22
Loss of Quorum .................................................. 23
Adjournment for Lack of Quorum .................................. 23
Effect of Vote ....................................................... 23
Election of Directors ................................................ 23
Votes Per Share--Voting of Fractional Shares ......................... 23
Voting Multiple Shares ............................................... 24
Cumulative Voting .................................................... 24
Voting of Shares by Fiduciaries, Minors, or Entities ................. 24
Personal Representative ......................................... 24
Trustee ......................................................... 24
Receiver ........................................................ 25
Pledgee ......................................................... 25
Minor ........................................................... 25
Corporation ..................................................... 25
Subsidiary ...................................................... 25
Corporate Fiduciary ............................................. 26
Shares in Names of Two or More Persons .......................... 26
Proxies .............................................................. 26
Presumptive Validity ............................................ 27
Duration of Proxy ............................................... 27
Death or Incapacity of Maker .................................... 27
Revocation of Proxy ............................................. 27
Proxy Providing for Irrevocability .............................. 27
When Irrevocable Proxy Is Revocable ............................. 28
62
Form of Proxy or Written Consent ................................. 28
Directors' Determination of Execution and Use of Proxies ......... 29
Voting Trust .......................................................... 29
Effect of Section ................................................ 29
Inspectors of Election ................................................ 30
Appointment ...................................................... 30
Number ........................................................... 30
Duties ........................................................... 30
Decision, Act, or Certificate .................................... 30
Conduct of Meetings ................................................... 31
Action Without a Meeting .............................................. 31
When Authorized .............................................. 31
Notice of Shareholder Approval ............................... 31
Revocation of Consent ........................................ 32
ARTICLE V. OFFICERS ....................................................... 33
Number and Titles ..................................................... 33
Appointment ........................................................... 33
Other Officers ........................................................ 33
Removal and Resignation ............................................... 33
Vacancies ............................................................. 34
Chairman of the Board ................................................. 34
President ............................................................. 34
Meetings ......................................................... 34
Share Certificates ............................................... 35
Instruments ...................................................... 35
Hire and Fire Employees .......................................... 35
Voting Shares of Other Corporations .............................. 35
Vice President ........................................................ 35
Secretary ............................................................. 36
Seal ............................................................. 36
Records, Reports, and Statements ................................. 36
Notices .......................................................... 36
Minutes .......................................................... 36
Minute Book ...................................................... 36
Articles of Incorporation ........................................ 36
Bylaws ........................................................... 37
Record of Shareholders ........................................... 37
Certify Records .................................................. 37
Share Certificates ............................................... 37
Exhibit Record of Shareholders ................................... 37
Exhibit Minutes to Shareholder ................................... 38
Exhibit Records to Director ...................................... 38
Other Duties ..................................................... 38
Absence of Secretary ............................................. 38
Assistant Secretary ................................................... 39
Chief Financial Officer ............................................... 39
Funds--Custody and Deposit ....................................... 39
Funds--Receipt ................................................... 39
Funds--Disbursement .............................................. 39
Maintain Accounts ................................................ 39
63
Reports to President and Directors ............................... 39
Financial Reports to Shareholders ................................ 40
Exhibit Accounts to Shareholders ................................. 40
Exhibit Accounts to Directors .................................... 41
Share Certificates ............................................... 41
Bond ............................................................. 41
Other Duties ..................................................... 41
Absence of Chief Financial Officer ............................... 42
Assistant Treasurer ................................................... 42
Compensation .......................................................... 42
ARTICLE VI. EXECUTION OF INSTRUMENTS AND DEPOSIT OF FUNDS ................ 43
Limitations ........................................................... 43
Execution of Instrument and Papers .................................... 43
Signing of Checks ..................................................... 43
Deposit and Withdrawal of Funds ....................................... 43
ARTICLE VII. ISSUANCE OF SHARES AND SHARE CERTIFICATES ................... 44
Authority to Issue .................................................... 44
Equality of Rights ............................................... 44
Consideration .................................................... 44
Share Dividends; Reclassification of Shares ...................... 45
Compliance with Corporate Securities Law ......................... 45
Payment for Shares ............................................... 45
Shares as Deemed Fully Paid ...................................... 45
Fractional Shares ..................................................... 46
Authority to Issue ............................................... 46
Failure to Issue ................................................. 46
Partly Paid Shares .................................................... 46
Options ............................................................... 47
No Preemptive Rights .................................................. 47
Employee Plans ........................................................ 47
Authority to Adopt ............................................... 47
Includable Features .............................................. 47
Certificates of Determination ......................................... 48
Execution of Officers' Certificate ............................... 48
Change in Rights ................................................. 48
Shareholder's Right to Share Certificate .............................. 49
Fractional Shares ................................................ 49
Partly Paid Shares ............................................... 49
Contents of Certificate ............................................... 49
Exchange of Certificates .............................................. 50
On Amendment of Articles or Otherwise ............................ 50
Contents of Order ................................................ 50
Lost, Stolen, or Destroyed Certificate; Issuance of New Certificate ... 51
Purchase by Bona Fide Purchaser .................................. 51
Alternative System in Lieu of Certificates ............................ 51
64
ARTICLE VIII. TRANSFER OF SHARES ......................................... 52
Duty of Corporation ................................................... 52
Nobility of Corporation ............................................... 52
Registration of Transfer ......................................... 52
Failure to Notify Corporation of Lost, Destroyed, or
Stolen Security .................................................. 52
Liability of Corporation .............................................. 53
Liability on Transfer of Partly Paid Shares ........................... 53
Good Faith Purchaser ......................................... 53
Purchase With Knowledge ...................................... 53
Transferor ................................................... 54
ARTICLE IX. CORPORATE RECORDS, REPORTS, AND SEAL .......................... 55
Minutes of Meetings ................................................... 55
Books and Records of Account .......................................... 55
Record of Shareholders ................................................ 55
Shareholders' Rights to Inspect Record of Shareholders by
Written Demand of Holders of Specified Percentage of Shares ...... 55
By Written Demand of Any Shareholder ......................... 56
Inspection by Agent or Attorney .............................. 56
Shareholders' Rights to Inspect Books of Account and Minutes .......... 56
Inspection by Directors ............................................... 56
Annual Report ......................................................... 56
When Required .................................................... 56
Contents ......................................................... 57
Special Financial Statements to Shareholders .......................... 58
Fiscal Year ........................................................... 58
Corporate Seal ........................................................ 58
ARTICLE X. CERTIFICATION, INSPECTION, AND AMENDMENT OF BYLAWS ............ 59
Inspection and Certification of Bylaws ................................ 59
Adoption, Amendment, Repeal of Bylaws by Shareholders ................. 59
Adoption, Amendment, Repeal of Bylaws by Directors .................... 59
ARTICLE XI. CONSTRUCTION OF BYLAWS ....................................... 60
Certificate of Secretary .............................................. 60
65